Experts suggest government to de-regulate fuel prices further by taking advantage of a possible downward trajectory in the global crude oil prices.
According to the latest report by the International Energy Agency (IEA), international crude oil price may remain muted on the back of moderation in demand amidst slowdown in the world economic growth.
Oil demand is expected to remain easy, going up by about 1.2 percent per annum (or 1.1 million barrels a day), to add up to 95.7 million barrels a day in 2017.
It is expected that oil intensity may fall as much as 2.5 percent per year. The lower price trend likely calls for prompt opening up and reform of the domestic retail oil market for efficient, transparently determined competitive prices, experts argue.
But the report warns that possible geopolitical risks and consequent supply rigidities, even disruptions could put upward pressure on oil prices in the short run. But the big picture emerging that ought not to be missed is this: the days of flaring oil prices may be history.
The likely secular decline needs to be leveraged for policy purposes to end dither, tentativeness and speed up much-needed pricing reform in key oil products like diesel. Putting paid to reckless consumption subsides built into retail oil prices would greatly benefit the fisc.