NEW DELHI: State-run fuel retailers on Tuesday reduced petrol price by Rs 2.42 per litre and diesel by Rs 2.25, but the motor fuels still remain costlier than jet fuel — which costs Rs 46.51 per litre in Delhi — due to four consecutive hikes in excise duty.
Petrol in the capital will cost Rs 56.49 from Wednesday, down from Rs 58.91, and diesel Rs 46.01, against the earlier rate of Rs 48.26.
Tuesday’s revision marks the tenth straight cut in petrol since last August and sixth in diesel rates since October. The petrol price is lowest since September 2010, while diesel is cheapest since March 2013.
The sharp reductions come three days before Delhi goes to polls. The retailers normally announce revision in rates on the 14th and last day of each month. This time, however, they took two more days to do so. No reason was given.
Even after the reduction, the retailers are making a margin of Rs 4 a litre on petrol and about Rs 3.6 per litre on diesel which they want to use for recouping inventory losses.
Oil firms buy crude oil at one price but by the time it is processed and turned into fuel — a process that may take up to six weeks — a fall in international rates results in inventory loss.
The government raised excise duty four times since November, totalling Rs 7.75 a litre on petrol and Rs 7.50 on diesel. But for the excise hike, the cumulative reduction of Rs 17.11 per litre in petrol price in ten cuts since August and Rs 12.96 a litre on diesel since its deregulation in October, would have been higher.
Petrol and diesel prices were last cut on January 17 by Rs 2.42 and Rs 2.25 a litre respectively. “Since that price revision, international prices of both petrol and diesel have continued to be on a downtrend and the rupee-US dollar exchange rate has appreciated. The combined impact of both these factors warrant a decrease in retail selling prices of both petrol and diesel,” IndianOil said.
The Economic Times, India