Oil Marketing Companies (OMCs) on Monday reduced petrol prices by 75 paise per litre owing to a declining trend in international crude prices as well as strong rupee-US dollar exchange rate. The decrease in petrol prices would be effective from midnight tonight and consequently it will cost Rs 72.26 per litre in the national capital from the prevailing Rs 73.16 per litre.
A statement by Indian Oil Corporation (OMCs) said that there was however no change in diesel prices as general elections are round the corner and they have sought the Election Commission's suggestion on the matter. The reduction in petrol prices comes a month after they were upwardly revised by 60 paise per litre on March 1, 2014. The IOC statement added that after the price revision, the overall price of petrol in New Delhi will come down by 90 paise a litre including VAT.
On diesel price hike, the OMCs stated that they will not raise diesel prices by the monthly 50 paise a litre decided in January last year as the loss on the fuel has dipped below the threshold of Rs 6 a litre because of the twin factors.
"The under-recovery on diesel is currently Rs 5.93 per litre which is below Rs 6 a litre, which is the interim subsidy cap recommended by the Expert Group 2013 of Dr Kirit Parikh. Hence, the issue of monthly price increase is under consideration of the Government and the matter has been referred to the Election Commission. A decision regarding revision of diesel retail price shall therefore be taken on receipt of further advice by the government in this context," IOC said.
Since January 2013, diesel rates have risen by Rs 8.33 over 14 monthly installments. Besides diesel, oil firms lose Rs 34.43 a litre on kerosene sold through the public distribution system and Rs 505.50 on every 14.2-kg cylinder of domestic cooking gas. The price of petrol was last cut on November 1, when it was reduced by Rs 1.15 a litre, excluding local taxes. losses on kerosene and lPG have declined from Rs 36.34 a litre and Rs 605.50 per bottle, respectively, at the beginning of the month. "During 2013-14, IOC has suffered an under-recovery on sale of three sensitive products of around Rs 73,000 crore (industry around Rs 1,41,000 crore)," the statement said.