Fuel prices which for some time have remained range bound on government's request made to the OMCs to not give jitters to the common public during the election season can no longer be expected after the polling ends on May 19. This is one main reason that OMCs while taking in the price pressure did not passed on the international pricing to the general public and absorbed a portion of the hike by itself.
So, more or likely as and when polling in seven phases comes to an end, we may see prices being revised on a daily basis in line with international pricing.
Also, the other reason is the levy of US sanction on oil imports from Iran from May 2 as all the previous waivers granted to as many as 7 countries come to an end from this date. And the global markets imported as much as 4% of the total imports from one of the leading crude exporter, Iran. And this cut of 4% is expected to impact prices, which are bound to rise higher.
And as it is the prices have spurted to $70.70 per barrel after factoring in various factors from political to economic, and some of the experts cite the commodity to even reach higher in price to as much as $100 per barrel. If this is the case, the Indian economy will be seriously impacted, with rupee likely to topple and trade balance also coming to a topsy turvy with a serious threat to trade deficit.
So, very like after the polling ends, oil retailers across the country will try and recover the past losses.