Petrol slash linked to stabilizing rupee: Moily

Union Petroleum Minister Dr. M. Veerappa Moily on Tuesday linked the slash in petrol prices to the recent trend of the stabilization of rupee, and announced that his ministry will launch a mega fuel conservation drive on Wednesday, which is aimed at cutting the oil import bill.

"The rupee has been appreciated that is why to that extent that we are in a position to manage it. That is how petroleum prices have come down," Moily said at a press conference here.

Moily announced that his ministry would launch a 6-week mega fuel conservation drive on Wednesday, October 2, to taper the demand and thereby cut oil import bill by USD 2.5 billion.

"Any countries that you know, the advanced countries, they are advanced because of taking such very hard decisions. Conservation is good. Liberally leaving the people you know, laissez faire manner is not going to help the country. This is how China has come up, how United States has come up and many other countries have come up," Moily said.

On Monday, petrol prices were cut by Rs 3.05 per litre, and diesel prices were raised by 50 paise per litre.

This was the first reduction in petrol rates in over five months, and comes as the most significant depreciation in over five years.

Meanwhile, earlier on August 30, Moily had outlined the drive as well as other measures in a letter to Prime Minister Dr. Manmohan Singh and Union Finance minister P. Chidambaram, and said his initiatives would help save the country approximately USD 20 billion in foreign exchange outgo.

In January, India allowed fuel retailers to raise the price of subsidized diesel in small amounts every month and asked bulk buyers to pay market rates.