The prices of petrol and diesel, already at unprecedented levels in the country, rose for the 10th consecutive day on Tuesday, even as analysts said the dual impact of rising oil prices and depreciating rupee increases regulatory risks for state-run oil and gas firms.
In the national capital, petrol was selling at Rs 79.31 per litre, up from Rs 79.15 on Sunday.
The surge in fuel prices is largely attributed to the rise in crude oil prices and high excise duty in the country. Brent crude oil is currently priced at over $78 per barrel.
The recent slump in the rupee has also lifted the import cost of crude oil, subsequently affecting the fuel prices.
Domestic credit rating agency Icra said in a report on Monday that global oil prices have risen by about 10 per cent over the past two weeks on declining inventories and faster-than-anticipated decline in Iranian exports as the countdown to the enforcement of US sanctions begins.
“While China and European Union intend to continue imports from Iran, banking channels and re-insurers are increasingly shying away, leading to sharp cut in purchases. The dual impact of rising oil prices and depreciating rupee does not auger well for PSU (public sector unit) oil and gas companies as it will increase their regulatory risks,” it said.
“As for the rupee, it has depreciated by about 11 per cent against the US dollar since the beginning of this calendar year, owing to its sensitivity to crude oil prices and significant outflows of foreign investment.
“Due to the high dependence on import of crude oil to meet domestic consumption, an increase in crude oil prices increases the current account deficit which is weighing down on the rupee,” it added.
High crude oil prices and negative global cues further brought down the Indian rupee that closed on Tuesday at a record low of 71.58 against the US dollar, weaker by 37 paise than its previous close of 71.21 per greenback.