Petrol and diesel prices on Thursday were reduced for the first time in over two months because of a drop in the cost of production, according to State-owned oil firms.
Petrol price was cut by 21 paise per litre and diesel by 11 paise, a price notification issued by state retailers said. This is the first price cut arising from a drop in international oil prices.
The rates were reduced by a minimum Rs 2.50 per litre across the country on October 5, when the Government cut excise duty on petrol and diesel by Rs 1.50 a litre and asked oil PSUs to subsidise the fuels by another Rs 1 a litre. The reduction in BJP-ruled states was more as they matched this cut by an equivalent reduction in local sales tax or VAT.
Petrol in Delhi now costs Rs 82.62 per litre as against Rs 82.83 a litre previously. A litre of diesel now costs Rs 75.58 as compared to Rs 75.69 previously. In Mumbai, petrol now costs Rs 88.08 per litre and diesel Rs 79.24.
The price cut follows international oil prices trading near the lowest level in a month on a bigger-than-expected gain in American stockpiles. West Texas Intermediate for November delivery traded 11 cents lower at $69.64 a barrel on the New York Mercantile Exchange, while Brent for December settlement was at $79.89 a barrel on the London-based ICE Futures Europe exchange. Brent had earlier this month hit a four-year high of $86.74 a barrel.
Prior to Thursday’s cut in rates, diesel price had risen by Rs 2.74 per litre since October 5 to more than wipe away the excise duty cut and oil firm subsidy. Petrol price had during this period risen by Rs 1.33 a litre.
Before the October 5 price cut, petrol in Delhi had hit an all-time high of Rs 84 per litre and diesel was at record Rs 75.45. This came down to Rs 81.50 per litre for petrol and Rs 72.95 in case of diesel.
In Mumbai, petrol had hit a peak of Rs 91.34 hit on October 4 and diesel was sold at a record high of Rs 80.10.
After the Centre cut excise duty by Rs 1.50 per litre and asked PSU oil firms to subsidise fuel by Rs 1, Maharashtra and Gujarat Governments were among the first to announce a matching Rs 2.50 cut.
They were later joined by Chhattisgarh, Jharkhand, Tripura, Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Haryana, Assam, Uttarakhand, Goa, Arunachal Pradesh and Bihar with similar moves.
