M Veerappa Moily hints at reduction in petrol price in next few days

Oil Minister M Veerappa Moily today hinted at a reduction in price of petrol in next few days, the first cut in rates in over five months.

The reduction in rates is likely to be announced by the month end as per the practice of fortnightly revision in prices, and has been made possible due to appreciation of rupee against the US dollar. "This is all dynamic pricing system and not static pricing... any advantage of price (reduction in international rates) and rupee (appreciation against US dollar) will be passed on to consumers... consumer will get full advantage," he said.

Asked if a cut in petrol price was possible on September 30, he said "hope so."

"Petrol price is a deregulated commodity, price of which is decided by our oil marketing companies based on input cost and other parameters," he said. If state-owned oil firms cut rates at month end, it will be the first reduction in prices since May. Petrol price was last cut on May 1 by Rs 3 per litre, the steepest reduction in rates in over five years.

However, since then petrol prices have been raised or gone up by seven times, totalling Rs 10.80 per litre, excluding VAT, as rupee depreciated sharply against the rupee. The price in Delhi has surged by Rs 13.06 per litre after including state tax, since June 1.

Last increase in petrol price was effected from September 14 when prices went up by Rs 1.63 per litre. Petrol costs Rs 76.06 per litre in Delhi.