OPEC countries have announced a big cut in oil production, due to which there has been an increase in crude. Oil producing countries have already indicated that they are putting full emphasis on keeping crude above $90.
Will the era of increase in petrol diesel start again?
After the recent fall in crude oil prices, the hopes of softening oil prices have suffered a major setback. In fact, in view of the fall in prices, OPEC+ countries have agreed to a big cut in oil production. After which there has been an increase in the prices of crude oil. Currently, Brent crude is trading above the level of $ 93 per barrel with an increase. After this decision to cut, there are indications that oil producing countries will now focus on keeping crude oil above the level of $ 90 per barrel. It is feared that the cost of companies will increase further and pressure on petrol and diesel prices may increase.
What is the decision of OPEC countries
The Organization of the Oil Exporting Countries (OPEC) and its allies (OPEC Plus) have decided to make major cuts in crude oil production to boost prices. It is believed that this step will prove to be another setback for the struggling global economy. In the first one-on-one meeting of energy ministers at the Vienna headquarters of the OPEC alliance since the start of the COVID-19 pandemic, it has been decided to cut production by 2 million barrels per day from November.
Earlier, OPEC Plus made a slight cut in production last month. Although there were major cuts in production during the pandemic, the exporting countries were avoiding major cuts in production for the past few months. OPEC Plus said in a statement that this decision has been taken in view of the uncertainty in the global economic and crude oil market scenario.
What will be the effect on petrol and diesel
Experts believe that the reduction in production will not have a significant impact on the price of oil and the price of petrol made from it because the members of OPEC Plus are already unable to meet the quota set by the group. And the chances of diesel becoming cheaper have decreased. Because this move of oil producing countries has indicated that they are insisting on keeping the price of Brent crude at $ 90 or above.
If Brent remains above $90, the government will have to bear the burden of cutting petrol and diesel prices. That is, if the government wants to reduce the price of oil, then it will have to cut its tax because there is a possibility that the oil producing countries have made up their mind to keep the prices above a level. However, due to recovery in demand, the pressure on petrol and diesel prices will increase in the event of a rise in crude. Let us tell you that the retail prices of oil in the country have remained stable for a long time.