Petrol prices cut by Re 1/litre; no change in diesel price

Moneycontrol Bureau

Petrol price is cut by Re 1 per litre with effect from midnight today, following a decline in international crude oil prices, however there is no change in diesel price, Indian Oil Corporation said while announcing the price revision today.

After including VAT, the reduction in price of petrol in Delhi comes to Rs 1.20 per litre while in Mumbai it comes to Rs 1.26. The fuel will cost Rs 66.09 and Rs 72.88 in Delhi and Mumbai respectively from midnight tonight.

Today's cut in petrol price comes on the back of 85 paise a litre reduction in rates on April 2 and Rs 2 a litre decrease effected on March 16. The March 16 cut after including VAT translated into a Rs 2.40 a litre reduction at pumps. It was the steepest cut in nine months.

Announcing the reduction, Indian Oil Corp (IOC), the nation's largest fuel retailer, said since the last price change international prices have declined from USD 119.23 per barrel to to USD 116.61 a barrel.

India’s three state-owned fuel retailers IOC, Bharat Petroleum Corp and Hindustan Petroleum Corp tend to move their prices together.

IOC did not explain why the rates of diesel, which as per the January decision of the government are to be hiked by 40-50 paise per litre every month till all of the losses on the fuel are eliminated, were not changed. The company said it is losing Rs 6.48 a litre on diesel. After deregulation of diesel price in January, oil retailers have hiked prices by 50-51 paise per litre on three occasions since then.   

Also read: Dual pricing in diesel a concern for oil companies

IOC said in addition to losses on sale of petrol and diesel, oil firms are suffering under-recovery (revenue loss) on sale of kerosene of Rs 30.49 per litre and domestic LPG of Rs 433 per cylinder.

Oil firms calculate the desired retail price on 1st and 16th of every month based on average imported oil price on the previous fortnight.

(With inputs from agencies)