OMCs cut petrol prices by Rs 2.46/l with effect midnight

Indian Oil Corporation today announced a cut in petrol prices by Rs 2.46 per litre, with effect from midnight tonight.

The cut will vary from Rs 2.46-3.22 per litre in different parts of the country. This cut comes before the fortnightly meeting of oil marketing companies (OMCs), and is on the back of crude prices falling to USD 90 per barrel levels. IOC chairman PK Goyal tells CNBC-TV18 that the OMCs have come to this decision as over recoveries on petrol were being passed on to the customers. “What over recovery we had has been passed on to the consumers in line with the international prices,” he said. This is the second rollback announced by OMCs after the steep hike of Rs 7.50 per litre in May. Overall, the rollback is now to the tune of Rs 5.46 per litre in Delhi. Minister of State for petroleum RPN Singh says that crude prices have cooled considerably and hence this cut was implemented. He further adds that this move did not come in earlier because of the rupee-dollar fluctuations. “OMCs had made up their mind that even if they make 10 paisa profit they will pass on the profit immediately to the consumer, and I think that is something very good,” he told CNBC-TV18. He goes on to say that the quantum of cuts would have been higher if the rupee hadn’t depreciated by such a large extent. “Every Rs 1 fall against the dollar leads to about Rs 8,000 crore losses to the oil companies,” he explained. In this round of cuts, Chennai sees the largest quantum of Rs 3.13 per litre, followed by Mumbai with Rs 3.10 per litre. Prices in Kolkata have been slashed by Rs 3.07 per litre. When it comes to diesel, kerosene and LPG prices, however, there is still no move from the government. Singh says that the government is not looking to raise prices of sensitive fuel products because of the cascading effect it has on consumers. “There is no proposal to currently hike diesel, LPG and kerosene prices,” he clarified. Currently, based on crude prices and the exchange rate, IOC says that the total under recovery for industry this year will be in the range of Rs 1.50 lakh crore.