Oil companies, which recently raised the price of petrol leading to a hue and cry with the Trinamool Congress threatening to pull out from UPA-II if the hike was not rolled back, have cut petrol prices in the country by Rs1.85 per litre(excluding taxes) just a week before the winter session of Parliament begins.
The decision will bring cheer to the public that witnessed 13 price hikes in the past one year, after the government de-controlled petrol. However, the prices of aviation turbine fuel have been increased by about 2% per kilo litre.
After adjusting the state taxes, petrol will be cheaper by Rs2.22 per litre in Delhi. In Mumbai, the reduction will be Rs2.34 per litre while in Kolkata and Chennai it will be Rs2.31 and Rs2.35 per litre respectively.
The three oil marketing firms — Indian Oil Corporation, Hindustan Petroleum, and Bharat Petroleum — had raised the petrol prices by Rs1.80 a litre on November 3. The reduced prices would be effective from Tuesday midnight.
The three oil marketing companies announced that after calculating November’s fortnightly crude price movement in the international market, the companies were making an over-recovery of Rs1.85 per litre of petrol, the reason why the decision to reduce prices by Rs1.85 was taken.
“The reduction has been possible as a result of favourable impact of slide down both in the international prices of MS (motor spirit) and in the rupee/dollar parity,” said a statement by Indian Oil Corporation.
“The rupee/dollar exchange rate, which had moved high in the second fortnight of October 2011, came down marginally and remained more or less stable in the vicinity of Rs49.30 per dollar in the relevant first fortnight of November 11,” it said.
It is interesting to note that while in the past, even when the international price of crude oil had come down, oil marketing companies had refused to cut petrol prices, citing under-recoveries. This time, the past fortnight figures, released by the ministry of petroleum, suggest that the Indian basket of crude oil has actually got expensive, yet the companies have cut prices.
A comparison between the fortnight of October 16-31 and November 1-14 suggest that the Indian basket of crude oil has become costlier by almost $4 per barrel. During the fortnight of October 16-31, the cost of crude oil per barrel was $108.59. It went up to $112.44 in the November 1-14 fortnight. Even the exchange rate variation from October (49.36) to November (50.08) is negative for the oil marketing companies.
In order to avoid any charges of cartelisation, IOC, HPCL and BPCL keep their prices different at their pumps and the difference is negligible, one or two paise per litre.
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