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Benchmark Brent crude was up 54 cents, or 1.1%, at $48.40 a barrel by 0247 GMT, while West Texas Intermediate (WTI) crude gained another 47 cents, or 1.1%, to $45.38 a barrel, the highest since early March.
Both Brent and WTI prices have risen nearly 10% in the last four days despite, industry reports showing a higher-than-unexpected rise in US crude stockpiles.
Higher crude oil prices mean the cost of sensitive petroleum products like petrol and diesel will also go up as the Oil Marketing Companies (OMCs), revise the domestic fuel rates daily and implement the changes with effect from 6 am.
The OMCs, which were increasing the petrol and diesel prices for five consecutive days, kept the domestic prices of automotive fuels in the four metros - Delhi, Mumbai, Kolkata, and Chennai - unchanged on Wednesday.
A liter of petrol now costs Rs 81.59 in New Delhi, Rs 88.29 in Mumbai, Rs 84.64 in Chennai, and Rs 83.15 in Kolkata, while a liter of diesel now costs Rs 71.41 in New Delhi, Rs 77.90 in Mumbai, Rs 76.88 in Chennai and Rs 74.98 in Kolkata, according to price notification by Indian Oil Corporation (IOCL), India's largest fuel retailer.
While the Petrol price has gone up by 53 paise, the prices of diesel rose by 95 paise per liter in the last five days.
However, with rising crude prices, the fuel prices are likely to go up further as the OMCs align the domestic rates with the global benchmarks by considering changes in foreign exchange levels.
A further rise in crude oil prices will be bad for the government and the consumers, as costlier crude will enhance India's crude import bill and lead to a further increase in retail petroleum products' prices.
The government has saved about Rs 1.6 lakh crore in oil import bill from January to December on account of lower crude oil prices, almost equivalent to Rs 1.7 lakh crore Covid-19 relief package announced for the poor in March.
Every $1 increase in crude prices, necessitates an almost 40 paise increase in petrol and diesel prices to be recovered from the customers. By this calculation, product prices would have to be increased by up to Rs 2 per liter to cover under-recovery on its sale.
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Rising crude prices is good for Indian oil explorers like ONGC and Oil India. ONGC shares were trading up 6% at Rs 81, while Oil India shares were trading up 3% at Rs 97 in a weak Mumbai market on Wednesday.