Petrol prices cut by Rs 2.50/ltr; no change in diesel price

Moneycontrol Bureau

Petrol price is cut by Rs 2.50 per litre excluding VAT with effect from midnight today across India 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 across India comes to Rs 3 per litre.  The fuel will cost Rs 69.73, Rs 63.09, Rs 65.90, Rs 70.35 per litre in Mumbai, Delhi, Chennai and Kolkata respectively from midnight tonight.

Today's price cut comes after three consecutive rate cuts since March on the back of falling international oil prices. Earlier oil retailers had cut petrol prices by Re 1 per litre on April 15 and 85 paise a litre on April 2.

The price cut announced today is the steepest since December 2008 when rates were slashed by Rs 5 to Rs 45.62 per litre.

Announcing the reduction, IOC, the nation's largest fuel retailer, said that since the last price change, international prices have declined from USD 116.61 per barrel to USD 107 a barrel. Rupee-US dollar exchange rate also improved from Rs 54.51 to a US dollar to Rs 54.26.

"Thus, it has been decided to pass on the benefit to customers and accordingly the aforesaid reduction in the retail selling price of petrol is being affected," an IOC statement said.

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 3.80 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: We are still losing Rs 3-4/ltr on diesel sale: BPCL's CMD

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 27.93 per litre and domestic LPG of Rs 379 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.