Petrol price cut by Rs 2.41 per litre, diesel by Rs 2.25 per litre

This was the sixth consecutive price cut for petrol since August

Oil marketing companies (OMCs) have slashed petrol prices by Rs 2.41 a litre and rates of diesel by Rs 2.25 a litre, including taxes, with effect from Friday night.

The steady decline in international crude oil prices led to the cut in the price of the automobile fuels, both of which are now market-linked.

“The international prices of both petrol and diesel have continued to be on a downtrend. The rupee-dollar exchange rate has appreciated slightly since the last price change. The combined impact of both the factors warrants the decrease in retail selling prices,” Indian Oil Corporation, the nation’s largest fuel retailer, stated.

The Union Cabinet had on October 18 approved the price decontrol of diesel. The move had led to an immediate reduction in retail prices of diesel, the most consumed petroleum fuel, by Rs 3.37 a litre on October 19 — the first price cut since 2009.

The latest revision in diesel prices is the first since the decontrol was put into effect. Petrol prices were decontrolled in June 2010 and have moved in tandem with international rates since then. The price of petrol was last revised downwards with effect from October 15 by Rs 1.21 per litre including state levies in Delhi on the back of declining international oil prices.

After Friday’s changes, non-branded diesel will be priced at Rs 53.35 a litre in Delhi and Rs 61.04 a litre in Mumbai. Non-branded petrol rates have come down to Rs 64.24 a litre in Delhi and Rs 71.91 a in Mumbai.

European crude price benchmark Brent fell 1.9 per cent to $84.61 per barrel on Friday, heading for the sixth weekly loss and its longest decline since 2002 as the 12-member Organization of Petroleum Exporting Countries boosted production to a 14-month high amid global surplus. The Indian basket of crude has slipped from its peak of $116 a barrel in June to $84.77 a barrel on Thursday.

IOC said it will continue to monitor the movement of prices in the international oil market and the rupee-dollar exchange rate closely and promised that the developing trends of the market will be reflected in future price changes. OMCs underrecoveries on diesel, cooking gas and kerosene stood at Rs 51,110 crore in the first half current financial year, a 16 per cent decline over Rs 60,500 crore in the corresponding period last financial year. Thanks to diesel decontrol, overall underrecoveries are likely to fall in a range between Rs 75,000 crore and Rs 80,000 crore in the current financial year.