Indian crude oil basket crosses $81/bl

The basket of crude oil that Indian refiners buy touched a new high of $81.06 per barrel on Tuesday, the latest day for which data is available. This is the first time that the price has crossed the $80 mark.

So far in October, the crude oil basket, which comprises Oman-Dubai sour (high sulphur) grade crude oil and Brent dated sweet (low sulphur) crude oil in 59.8:40.2 ratio, has averaged $76.54 a barrel compared with $74.83 in September and $69.03 in August.

With retail price of auto fuels de-linked from international crude price movements, customers would be spared a hike while the subsidy burden would go up for the three parties sharing the subsidy burden - oil marketing companies, Indian Oil, Hindustan Petroleum and Bharat Petroleum; oil exploration companies and the government.

Global oil prices, however, dipped marginally to $87.30 a barrel on Wednesday after surging more than 10% in six straight days of gains to hit a record $88 a barrel. "The marginal dip is primarily because traders are booking profits," a Mumbai-based analyst said.

Crude oil prices have been on the boil amid concerns of supply disruption as Turkey continues to prepare for a military operation into Iraq to tackle Kurdish militants.

Iraq is a major member of the Organisation of Petroleum Exporting Countries (Opec) and exported 1.68 million barrels of oil a day in September.

Expectations of a higher winter demand are also keeping crude prices firm, even as fears of a supply squeeze continue.