<p>Because the Russian oil is trading at a discount relative to new high price of oil. For example, if oil price increases from \$50 to \$100 per barrel and Russian oil trades at 30% discount, the discounted price is still \$70 which is 20\$ higher than old price of \$50.</p>
<p>At the end of May last year the price of barrel of oil was around \$66, this May the price went as high as to \$115 according to <a href="https://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic" rel="nofollow noreferrer">market watch</a>. The Russian oil is selling at around \$75 (see <a href="https://www.statista.com/statistics/1112243/urals-crude-oil-price/" rel="nofollow noreferrer">statista</a>), despite the discount (which is more than 30% now - see <a href="https://www.statista.com/statistics/1298092/urals-brent-price-difference-daily/" rel="nofollow noreferrer">statista</a>) it is still much higher than last year.</p>

CC BY-SA 4.0
2022-05-29T10:04:18.933Z
2022-05-29T10:04:18.933Z
1muflon1
<p>I am hearing that the Indian government is buying Russian oil at an all time high on discounted rate . Technically, the price of petrol diesel should go down in India . However ,I've heard that price of oil has increased in India and government will give subsidy to maintain the prices by using their forex reserve. I am curious to know how can price increase if they're buying on almost 30 percent discount rate.</p>

CC BY-SA 4.0
2022-05-30T09:13:50.580Z
Price of retail petrol and diesel also includes taxes. India had hiked taxes which have been recently decreased to ease inflation.
Dayne
<international-trade><nonexpert><oil>
India buying Russian Oil at discounted rate but why price hike?
CREATIVITY Unleashed
# India buying Russian Oil at discounted rate but why price hike?

(Asked by: username_0 on 2022-05-29)

I am hearing that the Indian government is buying Russian oil at an all time high on discounted rate . Technically, the price of petrol diesel should go down in India . However ,I've heard that price of oil has increased in India and government will give subsidy to maintain the prices by using their forex reserve. I am curious to know how can price increase if they're buying on almost 30 percent discount rate.

**Tags:** international-trade, nonexpert, oil

> **Comments:**
> **username_1**: Price of retail petrol and diesel also includes taxes. India had hiked taxes which have been recently decreased to ease inflation.  

---

## 1 answers

### Answer by username_2 on 2022-05-29. Score: 1

Because the Russian oil is trading at a discount relative to new high price of oil. For example, if oil price increases from \$50 to \$100 per barrel and Russian oil trades at 30% discount, the discounted price is still \$70 which is 20\$ higher than old price of \$50.

At the end of May last year the price of barrel of oil was around \$66, this May the price went as high as to \$115 according to [market watch](https://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic). The Russian oil is selling at around \$75 (see [statista](https://www.statista.com/statistics/1112243/urals-crude-oil-price/)), despite the discount (which is more than 30% now - see [statista](https://www.statista.com/statistics/1298092/urals-brent-price-difference-daily/)) it is still much higher than last year.


---

