The Indian crude oil basket rose to nearly $103 per barrel on Wednesday, up for the second straight day after falling below $100 a barrel early this week, even as the political blame game on domestic fuel rates intensified.
In what has been a political potboiler, fuel rates have risen sharply since March 22 as global crude costs have jumped because of the Russia-Ukraine crisis distorting supply chains which were already disrupted by the pandemic and were just about getting streamlined.
While Prime Minister Narendra Modi urged a cut to the value-added tax (VAT) on petrol and diesel prices, which state governments set, to relieve high fuel rates, many states - especially those ruled by opposition parties rejected that request. Instead, they urged the Modi government to cut the cess, which the centre levies.
Beyond that political debate, in the international markets, the price of the Indian crude oil basket jumped to $102.98 per barrel at an exchange rate of Rs 76.64 against the dollar on Wednesday, according to the latest report from the Petroleum Ministry's Petroleum Planning and Analysis Cell's (PPAC) released on Thursday.
That price had fallen below the $100-mark on Monday, but it bounced back above that level on Tuesday to $100.2 per barrel.
Indeed, the PPAC had reported India's crude oil basket price eased to $99.17 per barrel on Monday from a high above $100 in the previous week.
That see-saw in prices reflects the volatile trades in the global crude markets, which have been whiplashed between supply and demand dynamics but have primarily held above the $100-a-barrel-mark.
But the path of least resistance for crude oil seems to be to the upside as the energy crisis accelerates after Russia turned off its gas supply to Poland and Bulgaria yesterday, demanding rouble payments for gas exports.
That is mainly in response to Western sanctions on Moscow for its attack on Ukraine.
For India, though, that escalation points to more trouble ahead because it depends on imports for 84 per cent of its oil needs.