Domestic petrol and diesel prices have fallen by nearly 20 per cent over the last 20 months as global crude oil prices crashed from around $115 per barrel in June 2014 to $30-35 per barrel currently.
Petrol is retailing at around Rs 57 per litre in Delhi, while diesel prices are around Rs 46/litre, even though the government has not passed on the complete benefit of global crude oil fall.
But things might change soon, according to market analyst Sushil Kedia, who expects a big spike in global oil prices. His comments come at a time when crude prices are trading around their highest levels in eight weeks.
Mr Kedia told NDTV Profit that global oil price benchmark, NYMEX crude, could rocket to $85/barrel in a year. NYMEX - the name for crude oil (WTI) traded at the New York-based commodity exchange - prices are at $34.5/barrel currently. (Watch)
According to Mr Kedia, global crude oil prices could head lower before the next upmove, which will take prices to around $85/barrel.
"On crude, there is a prospect now visible on charts that a new low will come. That would likely to be final bottom," he said.
"When that new low comes, prospects are from there will be a massive rebound. When the rebound comes, I will confirm the call that the final bottom would have been seen and the move to $85 in one year should erupt," he said.
Global crude oil prices have been depressed because of concerns over global economic growth, particularly that of China. Oversupply of crude in global markets has also weighed on oil prices.
In India, repeated excise duty hikes have prevented the pass-on of the full benefits of the global slide to consumers.
Many analysts have forecast oil prices to rise sharply in a year's time. Global brokerage HSBC expects average Brent crude price rising to $60 in 2017 and $75 by 2018.
If global crude prices go up sharply, then analysts say that the government will have a challenging time meeting Budget 2016-17's fiscal deficit target of 3.5 per cent.
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