Daily Current Affairs – 2020
Topic: For Prelims and Mains
Benchmark Brent Crude Prices
17th September 2019
Why in News?
Prices of petroleum products like petrol and diesel are likely to go up by up to Rs 5 a litre each over the course of the next few days as international crude oil prices shot up after the drone attack on Saudi Aramco’s facility at Abqaiq.
Benchmark Brent crude prices were up by over $6 at $67 a barrel recently, which is a jump of over 10%, and could rise further.
- Oil marketing companies (OMCs) will have to increase the retail product prices in a fortnight.
- Besides, the sharp jump in global crude prices may also put pressure on refining margins amid slowing demand, increasing the OMCs’ prospects of making losses.
- “We do not rule out the possibility of moderation in marketing margins on auto fuels — a $10/per barrel rise in global crude and product prices may require OMCs to increase retail price of diesel and gasoline by Rs 5-6/litre in the following fortnight,”
- Bharat Petroleum Corporation Limited (BPCL) closed down 7% to Rs 10, Hindustan Petroleum Corporation Limited (HPCL) lost 5.7% ending at Rs 255.55, Chennai Petroleum Corporation Limited (CPCL) closed down 3% to Rs 188.75, while Indian Oil Corporation Limited (IOCL) and Reliance Industries (RIL) lost 1.15% and 1.20% respectively.
Oil output drops :
- Following the drone attack on its oil processing facility at Abqaiq, Saudi Aramco has cut down its oil production by 5.7 million barrels per day (mbpd).
- This has reduced global oil supply by 6%, which is huge. However, this will not result in a physical shortage of oil for India.
The real impact for India will be the rise in prices.
- The $6-7 per barrel increase in oil prices has an immediate impact on India. Based on past experience, if the price of oil crosses $70-75 per barrel, the government may start thinking of bringing back the administered pricing mechanism.
- Meanwhile, an Air India official said a 10% rise in the cost of aviation turbine fuel adds Rs 50 crore to its monthly fuel bill.
What is Brent Crude Prices?
- Brent Crude is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide.
- The Brent blend of crude oil is a type of sweet crude oil that is used as a benchmark for the prices of other crude oils. Brent blend is most often found in parts of the North Sea off the coast of the U.K. and Norway.
- It is a mix of crude oil from several facilities in the Ninian and Brent fields on the North Sea.
- Brent futures are traded on both the ICE and NYMEX exchanges, with delivery dates for all 12 months of the year.
Facts for Prelims:
11th International Hrant Dink Award:
Meghalaya-based rights activist Agnes Kharshiing, who survived an assault by the coal mafia almost a year ago, received the 11th International Hrant Dink Award along with Turkish activist against male violence Nebahat Akkoç.
- It is given in the memory of Turkish-Armenian journalist Hrant Dink, who was killed in 2007, in Istanbul
- The Hrant Dink Award is presented every year to individuals, organisations or groups that work for a world free from discrimination, racism and violence.
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NIRVIK (Niryat Rin Vikas Yojna):
The ECGC (Export Credit Gurantee Corporation of India) has launched This Yojana to provide more comfort to banks to lend to exporters.