LPG cheaper by Rs25, petrol down Rs5, diesel Rs2

The UPA government on Wednesday night slashed fuel prices, making cooking gas cheaper by Rs25 per cylinder in a major relief to consumers just three months ahead of the next Lok Sabha elections.

The prices of petrol were slashed by Rs5 per litre and diesel by Rs2 a litre in line with the fall in global crude rates. The revised prices are effective from Wednesday midnight. There is, however, no change in the prices of kerosene.

The announcement to slash the fuel prices came just a day after Congress president Sonia Gandhi had indicated it at a political rally in Uttar Pradesh.

Retail petrol will now cost Rs 44.80 per litre in Mumbai, while diesel will be sold at Rs 34.69 per litre in the city. An LPG cylinder will now cost Rs25 less per 14.2-kg cylinder in Mumbai.

After a marathon Cabinet meeting late on Wednesday, RS Pandey, secretary, ministry of petroleum and natural gases, told reporters, “Under-recoveries for the oil market companies will be calculated on trade parity basis as a special dispensation for this financial year. Rs 32,000 crore of that will come from upstream companies (like ONGC and Oil India Ltd) and the rest from the government as oil bonds.”

Last December, the government reduced prices of petrol by Rs 5 per litre and that of diesel by Rs 2 per litre as an interim measure after international crude oil prices dropped almost $100 — over 71% — in less than seven months to about $42 a barrel from an all-time high of $147.27 a barrel on July 11 last year.