The oil price has been rallied down as the U.S. has halted back the limited military attack on Syria. The U.S. has supported Russia’s plan to submit all the chemical weapons to the U.N. by Syria. The potential geo-political tension has moved back and the oil prices which was supposed to increase due to the vigorous supply cut from the Middle East has decreased.

The oil prices which seemed to increase last week has now dropped. Futures dropped as much as 0.8% in the NYMEX. Brent for October settlement has decreased by 2.2% on the London-based ICE Futures Europe Exchange.

The slid of the INR by about 17.15% against US Dollar has reached the INR to 64.08 per US Dollar dropping down by 0.4% yesterday. RBI’s new Governor Raghuram Rajan, the then former Chief Economist at World Bank and predictor of the 2008 global financial crisis, is moving forward to strengthen the currency and reduce the current account deficit.

India has implemented the plan to reduce the import of gold by about 2/3rd this year by imposing higher taxes on imports. India was the largest importer of gold last year consuming about 20% of the world’s gold production. Other than the gold, it is also the fourth largest nation in oil imports. India imported total of 200747 thousands metric tonnes(TMT) equivalent to $156973million of which total crude imports accounted for 184795 TMT valuing $144293 million during the period of April 2012-March 2013. Nepal’s petroleum products accounted for more than 21% of the country’s import bill amounting to Rs. 109 billion in the FY 2012/13.

As seen the US Dollar being weaker and INR a bit stronger, Nepal Oil Corporation(NOC) lastly published news of oil price hike on Tuesday making the petrol dearer by Rs. 5 per liter to Rs. 130 per liter and diesel/kerosene price to Rs. 103 per liter. The domestic aviation fuel rallied up to Rs. 137 per liter. Also, the USD/INR has gone up to 63.8550 from 68.85 as of August 28.

In a condition of the stronger INR and decrease in the global oil prices, the price hike of middle distillates (aviation fuel, petrol, diesel and kerosene) does seem opposite in action taken by the NOC. Though NOC had loss on petrol, diesel and kerosene; the lack of timely scientific adjustment in price of middle distillates by NOC has aroused this price hike.