NEW DELHI: State-run fuel retailers on Thursday cut petrol price by Rs 2.46 a litre, excluding state taxes, as the fuel became cheaper in bulk markets on the back of declining global demand.
There would be no incremental reduction in Delhi since the state government had pared local taxes on June 18. But in other states petrol would become cheaper by more than Rs 3 a litre due to a proportionate reduction in local levies.
This is the second time that fuel retailers reduced petrol price since they raised it by Rs 7.50 a litre on May 24. The retailers had last reduced the price by Rs 2 a litre. For consumers in Delhi, this would be the third reduction in the fuel’s price if one were to account for the reduction in state taxes.
The latest round of cut would generally shave more than Rs 5 off the steepest-ever increase. In Delhi, the total reduction in the last 30 days would be Rs 5.40 a litre.
But the reduction neither satisfied the opposition BJP nor UPA ally Trinamool Congress.
BJP spokesperson Tarun Vijay demanded that the price should have been brought down to the level prevailing before the May 24 (Rs 7.50 a litre) increase.
Trinamool chief and West Bengal CM Mamata Banerjee said the price has been cut with an eye on the July 19 presidential election and would be increased later.
“The price has come down because of the presidential election. They will increase the price later… The price of crude oil has decreased by Rs 100. The price of petrol should have been cut by Rs 10 to Rs 30 per litre,” she told reporters in Kolkata.
Thursday’s announcement of the price-cut broke the cycle – on 15th and last day of each month – that fuel retailers have been following so far to revise petrol price. ToI had on June 16 first reported the move that is aimed at ending market speculation and hoarding by dealers.
Every fortnight, there were reports of dealers hoarding or not lifting stock from the companies – depending on whether the price was going up or down. Consumers too would rush for a refill the evening before a hike was expected, creating chaos in petrol pumps and demand spike. The government is examining the option of a daily or weekly price revision, first reported by ToI on Thursday.
On its part, market leader IndianOil warned that the good times may not last long as the fall in rupee’s value against the Greenback remained a cause for worry. It also said that crude prices had dropped to “unsustainable” levels as global economic worries pulled down demand for fuels.
Pump price of petrol in India is set directly in accordance to the fuel’s price in the regional trading hub in Singapore. The price of motor spirit/gasoline – trade name for petrol has come down to $106-$107 a barrel from $115.81 when petrol price was cut last on June 2. But the rupee-dollar exchange rate has worsened to 56.20 from 54.96 in the same period.
No wonder, IndianOil said it would continue to closely monitor the international oil prices and the evolving scenario in rupee-dollar exchange rates to assess their potential impact on selling prices in future.