Petrol price slashed by Rs 2 per litre

Providing much needed relief to consumers, Oil marketing companies (OMCs) have slashed the price of petrol by Rs 2 per litre - the steepest reduction in rates in nine months. 

While petrol price has been cut by Rs 2 per litre, excluding local sales tax or VAT, there will be no change in diesel rates. The revised petrol price is effective from midnight. 

The reduction in petrol prices was possible due to fall in international crude oil prices. While, the slide in international prices of crude oil from 112.73 USD per barrel to 107.41 enabled reduction in petrol prices, it has also helped in lowering the losses on diesel sales. Losses on diesel have come down to Rs 8.64 per litre from Rs 11.26 at the beginning of the month, according to Indian Oil Corp (IOC), which announced the price revision.

It was expected that oil firms will also effect the monthly hike of 40-50 paise per litre in diesel rates but they deferred the decision apparently to save the government from trouble in Parliament. When oil firms had last hiked petrol price on March 2, the opposition parties had disrupted one full day's proceedings.

The cut in petrol price follows two rounds of hike in rates since February. Petrol price was hiked by Rs 1.50 a litre on February 16 and then by Rs 1.40 per litre from March 2. Both the increases were excluding local VAT.

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