Rupee weakness could erase petrol diesel relief as SBI warns costs rise fast with any more depreciation

Another Rs 2 rupee drop could neutralize fuel hike benefits

SBI Research warns the rupee is at a critical depreciation threshold, where any further fall could cancel out benefits from the recent Rs 3 per litre petrol and diesel price hike. The report says even an extra Rs 2 depreciation increases the effective crude oil price, raising landed import costs enough to fully offset the relief to Oil Marketing Companies. OMC under-recoveries are soaring to about Rs 1,000 crore per day, and SBI also flags inflation and external risks from crude market pressures.