May 1, 2013: Labour Day has brought some cheer to petrol-engined vehicle owners, who will now get more fuel for their money. Effective midnight of April 30-May 1, State-run fuel retailers reduced the price of petrol across the country by Rs 3 a litre.
This is the sixth reduction within a span of two months and the sharpest slash in over nine months, bringing down the price of petrol in Mumbai to Rs 69.73 per litre. On March 2, the price was Rs 7.93 higher, at Rs 77.66. These price reductions are a result of a continuous fall in international oil prices and also a strengthening rupee. While the fuel will now cost Rs 63.09 a litre in New Delhi, in Kolkata motorists will pay Rs 70.35 and Rs 65.90 in Chennai (see petrol price reduction chart below).
According to Indian Oil Corporation, the largest oil marketing company in India, since the last price change on April 16, international prices of petrol have gone down from around $116/bbl to around $ 107/bbl. The Indian rupee-to-dollar exchange rate has also appreciated slightly from Rs 54.51 to Rs 54.26 during the same period. One bbl or barrel is the unit of volume for crude oil and petroleum products and equals 42 US gallons or 35 UK (imperial) gallons, or approximately 159 litres.
No change in diesel prices
There is, however, no change in the price of diesel although the OMCs were expected to hike prices by 40-50 paise a litre on April 15. In a government decision taken in January 2013, it was decided to increase the price of diesel per litre by 40-50 paise till all losses on the fuel are eliminated. According to IOC, OMCs are currently losing Rs 3.80 per litre of diesel fuel.
A fortnight ago, on April 16, this loss was Rs 6.48 per litre, which means OMCs are gradually recovering their losses on diesel, even with the delayed price rise on the fuel. The government is unable to bite the bullet consistently with diesel prices, which has always had a political equation in India; it seems with petrol prices dipping, a hike in diesel prices will give some more charge to the opposition which is currently baying for the government’s blood.