Petrol price to reduce by 95 paise effective midnight

Following an appreciation in the value of the rupee, state-owned oil companies have announced a minor reduction in petrol prices from 95 paise per litre, effective midnight. With that, petrol will cost Rs 67.24 per litre in Delhi from Rs 68.19 earlier. Price cuts in other cities will differ based on tax. For instance, in Mumbai the reduction will be Rs 1.20 per litre bringing petrol prices down to Rs 73.53 per litre (Refer to chart below for city-wise pricing).

Petrol prices were last reduced by 56 paise on October 9. However, the price was raised again by 29 paise on October 27 after the government approved an increase in the commission paid to petrol pump dealers. “There has been some reduction in gasoline rates giving us some margins [on petrol]. But they have moved up again in the last few days,” said R S Butola, Chairman, Indian Oil, earlier this month according to a PTI report. Related: Petrol price slashed by 56 paise per litre

The government had deregulated petrol prices in June 2010 letting oil firms fix rates as per prevailing costs. However, this move is not streamlined yet and government authorities still keep fuel prices in check to help manage inflation. Indian Oil lost Rs 1.16 crore on selling petrol below cost during first six months of the current fiscal. According to the oil company, tremendous volatility in the rupee-dollar exchange rate may further lead to a price correction in the near future.

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