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New Delhi: A fortnight
after giving consumers relief for the first time in almost three
years, India's fuel retailers again cut petrol prices Wednesday --
by 65 paise a litre, excluding state taxes and levies -- bringing
further succour to vehicle owners.
The price cut, effective midnight Wednesday, move may help the
United Progressive Alliance (UPA) government in a price rise
debate in parliament in the ongoing winter session of parliament
as opposition parties are likely to highlight the high cost of
petrol during the debate.
IndianOil Corp (IOC), the largest of the three state-run oil
marketing companies (OMCs), said a fall in global crude prices was
the reason it could bring down prices of petrol.
"The review of international oil prices and exchange rate of the
relevant fortnight brings out a further downtrend in international
oil prices and a further weakening of the exchange rate," the
company said in a statement.
"The combined impact of both the factors is an over-recovery of
Rs.0.65 per litre. It has, therefore, been decided to revise the
MS (motor spirit) prices downward by Rs.0.65 per litre (excluding
state taxes and levies) with effect from Dec 1," the company said.
Meanwhile, IOC expressed concern over the rupee depreciation to
Rs.51.50 to a US dollar.
"However, current trend is of increasing international MS (motor
spirits) price and further deterioration of exchange rate. These
developments are being monitored closely and will impact the
directions of prices in the next pricing cycle," the company said.
Petrol prices were slashed on Nov 15 by Rs.1.85 per litre. The cut
was the first after January 2009.
The three state-run oil firms including IOC, Hindustan Petroleum
and Bharat Petroleum review motor spirit prices on fortnightly
basis and based on the review, fix prices for the next fortnight.
The current and new petrol prices in the four metros are as under:
Old New
New Delhi Rs.66.42 Rs.65.64
Kokata Rs.70.84 Rs.70.02
Mumbai Rs.71.47 Rs.70.65
Chennai Rs.70.38 Rs.69.55
OMCs, however, claim they continue to incur under-recoveries on
account of selling diesel, kerosene and cooking gas below their
international prices. All the three fuels are still regulated by
the government, compared to petrol which is sold at a de-regulated
price.
"While international prices of MS has declined during the period
under review, international prices of the three sensitive have
shown a sharp uptrend consequently having a further adverse impact
on under-recovery on sales of these products," IndianOil Corp
(IOC) said.
The under-recoveries on diesel has increased from
Rs.10.17-to-Rs.12.03 per litre. The under-recoveries on kerosene
and cooking gas also went up from Rs.25.66-to-Rs.28.56 per litre
and Rs.260.50-to-Rs.286.50 per cylinder, respectively.
"The increase in under-recovery on sensitive products would
increase the per day under-recovery of OMCs from Rs.384 crore per
day during fortnight of 16-to-30.11.11 to Rs.452 crore per day
from Dec 1," the company added.
The projected total under-recovery of IndianOil for 2011-12
(excluding petrol) is estimated to be over Rs.71,000 crore and for
the OMCs together would be around Rs.1,30,000 crore.
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