Monday, 15 April 2013

Petrol prices cut by Re 1/litre effective midnight, third reduction in one month




Petrol price was today cut by Re 1 per litre, effective midnight tonight -- the third reduction in rates in one month. The price cut, which was made possible because of fall in international oil prices, excludes local sales tax or VAT.

After including VAT, the reduction in price of petrol in Delhi comes to Rs 1.20 per litre and the fuel will cost Rs 66.09 per litre from midnight tonight against Rs 67.29. However, there will be no change in diesel prices even though today was the appointed day for putting into effect the government decision to hike rates by 40-50 paise a litre.

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.

Petrol in Mumbai will cost Rs 1.26 less at Rs 72.88 per litre. In Chennai, the price has been cut by an equal measure to Rs 69.08. It will cost Rs 73.48 a litre in Kolkata from tomorrow against Rs 74.72.

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

The company said it is losing Rs 6.48 a litre on diesel. Oil firms calculate the desired retail price on 1st and 16th of every month based on average imported oil price on the previous fortnight.

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.

Although petrol prices had been deregulated in June 2010, they have rarely moved in tandem with cost. This resulted in Rs 500 crore loss to IOC (Rs 1,150 crore loss to state fuel retailers) during 2012-13.


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