IOC declares cut in petrol prices on stronger Re

IOC director of finance PK Goyal explains to CNBC-TV18 the various aspects of the PSU's decision to cut petrol prices by nearly 56 paise a litre.

Also Read: IOC cuts petrol price by 56 paise/litre effective midnight

Below is an edited transcript of the interview on CNBC-TV18.

Q: What was the trigger to cut petrol prices?

A: We initiated a cut because we wanted pass on the benefit of the appreciation in the rupee to our consumers.

Q: Why did you decide to announce the cut today ahead of the fortnightly review of the under-recoveries?

A: We are empowered to change the price as and when required. This does not depend on the fortnightly review.

Q: Over the weekend, there were reports on the high cost of non-subsidised LPG. Why are petrol prices coming down while LPG prices are going up?

A: LPG prices have gone up mainly because of change in the dealers' commission.

Q: It has nothing to do with the rupee?

A: The increase in the price of LPG is because the dealers' commission has been revised. This commission is not part of the under-recovery mechanism. Last fortnight, the rupee appreciated from 55 to 52. So, that is the main reason for the cut in petrol prices. We have mentioned in our press release that the price will be reviewed as and when required.

Also Read: Rupee posts biggest single-day fall in three months

Q: How much have you lost on petrol sales so far this fiscal?

A: We have mentioned that up to September 30, the total under-recoveries for the industry are at Rs 2,600 crore.

Q: Will BPCL and HPCL also announce a similar cut in fuel prices today?

A: That is for them to decide accordingly.

Q: If we continue to see the rupee continue to appreciate, will prices of diesel, LPG and kerosene fall?

A: There is already an under-recovery on these three products. In LPG, we have mentioned that on HSD still the under recovery is Rs 11.65.

Q: You are not anticipating any price-cuts as far as diesel and LPG goes?

A: There is an under-recovery on these two products.

Q: Are you making any profit on petrol?

A: I have just mentioned that on the basis of the appreciation in the rupee last week the prices have been reduced.

Q: If the rupee continues to behave the way it has we can see petrol prices becoming cheaper?

A: That is too early to comment. But if there is a further appreciation in the rupee,  then definitely the benefit will be passed on.

Q: Any relief for the consumer as far as branded petrol is concerened?

A: The price of branded petrol will also be reduced by 56 paisa.