Petrol and diesel prices will be reduced only if the current drop in international oil prices is sustained for a few more days, as domestic retail prices are fixed on a 15-day rolling average, official sources said.

Global benchmark Brent crude oil prices remained largely range bound at around USD 80 to 82 per barrel, levels during November (till November 25).On Friday, November 26, prices fell by around USD 4 per barrel till Asian timestamp. However, subsequently after the opening of the US market, with the drastic sell off in Brent Futures, prices fell further by around USD 6 to close at USD 72.91 a barrel at ICE London. Sources said, this seems like a knee jerk reaction from fears that the new Covid-19 variant discovered in Southern Africa might dampen economic growth and trigger another demand slump.

State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise petrol and diesel prices on a daily basis.

But this revision is based on the average benchmark international fuel rate in the previous fortnight. So, the price on Sunday is decided by the average in the previous 15-days.

“Natural expectation from the drop in rates on Friday is that retail pump rates will also go down. But that is not how retail rates move. Since the international oil prices have been range bound in most of November, the drop on Friday when averaged out with the previous fortnight does not translate into any significant change.

“Only when the fall in rates is sustained for a few more days will we see a reduction in retail petrol and diesel prices,” a source said.