As Covid-19 spreads across world, oil prices slump to 17-year low2Photo© hindustantimes.com

As Covid-19 spreads across world, oil prices slump to 17-year low

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International oil slumped to a 17-year low as coronavirus lockdowns hit major economies, causing demand to contract. In India, petrol and diesel prices have been frozen since March 16, despite the average crude oil import cost dropping by over a fifth. Another excise duty increase is likely soon as the government seeks to reinforce its war chest against Covid-19.

The benchmark Brent crude price on Monday dropped by as much as 6.62% to $23.28 per barrel. The price of West Texas Intermediate (WTI), another benchmark in oil pricing fell below 5% to around $20 a barrel.

Besides reduced demand because of the coronavirus pandemic, an oil price war between Saudi Arabia and Russia has contributed to the plunge in the price of crude. For the government, it means a windfall gain, boosted by one hike in excise duty earlier this month, to be followed by one more that’s in the works.