Ten days before Christmas, the government has done a Santa Claus act, cutting petrol and diesel prices by Rs 2 per litre, thanks to international crude oil prices crashing to a five-year low. In fact, the price cut was expected given the sharp fall in global prices.

This reduction makes it the eighth reduction in petrol prices since August (effectively down by Rs 12.27 per litre cumulatively) and the fourth for diesel (down by a cumulative Rs 8.46 a litre) since October 2014. The new prices are effective midnight of December 15.

As a result of the price cut, in New Delhi, petrol will now cost Rs 61.33 a litre, the lowest in 44 months, as compared to its earlier price of Rs 63.33. In Mumbai, motorists can tank up on petrol at Rs 68.86 a litre, down by Rs 2.09 a litre. 

Diesel will now cost Rs 50.51 a litre in Delhi, the lowest it has been since July 2013, as against the earliest price of Rs 52.51. In Mumbai, diesel will now cost Rs 57.91 per litre as against the earlier price of Rs 60.11. 

According to a statement by leading oil marketing company (OMC), Indian Oil Corporation, “The prices of petrol and diesel were last revised downwards on December 1 by Rs 0.91 a litre and Rs 0.84 a litre respectively on the back of declining international oil prices. Since then, the international prices of both petrol and diesel have continued to be on a downtrend. The rupee versus US dollar  exchange rate has however appreciated since the last price change. The combined impact of both these factors warrant a decrease in retail selling prices of both petrol and diesel. The movement of prices in international oil market and rupee-dollar exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes.”