Last Updated: 25th September, 2020
NEW DELHI: The hike in petrol and diesel price has refused to stymie for pretty much 3 weeks currently. On Tuesday, fuel prices hit a brand new record high because it saw an dealing for the 16th consecutive day, with petrol being sold-out at Rs. 78.43 per litre in Delhi and Rs. 86.24 per litre in Mumbai. The hike has been intense despite world crude oil prices thinning out to the mid-$60 dollar per barrel range from the $80 it had hit many days back.
The price of diesel per liter has additionally raised to Rs. 69.31 per liter in Delhi and Rs. 73.79 a liter in Mumbai. The government, on over one occasion, has talked a few ‘long-term’ solution to insulate retail prices from the volatility in world crude oil price. A development that happened on Monday appears to be the primary concrete step towards this.
The oil ministry headed by Dharmendra Pradhan has given the in-principle nod to the Indian Commodity Exchange (ICEX) to launch futures on petrol and diesel. “We have received the ‘no objection’ from the ministry,” aforementioned Sanjit Prasad, MD, ICEX.
Oil ministry has given the in-principle nod to the Indian Commodity Exchange (ICEX) to launch futures on petrol and diesel
However, for the move to fructify, ICEX wants clearance from the Securities and Exchanges Board of India (SEBI). “If SEBI provides the plow ahead, the exchange is ready to launch the products at intervals on a daily basis,” Prasad aforementioned.
WHAT ARE THE FUTURES?
By definition, Futures are monetary contracts that obligate the customer to buy an asset or the vendor to sell an asset at a preset future date and price. Thus, futures mercantilism involves shopping for specific quantities of a commodity or monetary instrument at a specific price with delivery set at a given time in the future.
Futures trading involves buying specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future
HOW IT SHOULD BENEFIT CONSUMERS?
The launch of futures contracts on diesel and petrol can enable consumers to shop for these contracts at a fixed price to require delivery at a future date. This suggests if they get some quantity of petrol and diesel at a specific price on a selected date for taking delivery say after a month, and though the price is higher on the date of delivery, they’re going to still get the products at identical prices on the date of purchase.
Thus, futures mercantilism of Petro products would possibly facilitate guard against volatility in prices triggered by global factors. Since June 2017, oil marketing corporations in India are changing the prices of diesel and petrol daily.