NEW DELHI, September 29: State oil firms may cut petrol rates marginally when they revise gasoline rate on Saturday because international oil prices have soften and the rupee has appreciated, government and industry officials said.
“The government would like to grab the first opportunity to reduce petrol rates for political mileage, even if it will be a token cut. Recently, there have been some positive movements of crude oil and exchange rates, but it is not very significant,” said a senior executive of state oil firm.
The average cost of crude oil purchases for Indian firms has now gone down by about $2-3 a barrel while the rupee rose five months high at 52.69 against dollar, giving some room for petrol price cut, officials said. Indian refiners imports more than 80% of crude oil they process and pay in dollar.
“We will review petrol prices today and take a decision regarding its price revision,” chairman of an oil company said requesting anonymity.
Indian Oil, Bharat Petroleum and Hindustan Petroleum BSE 0.38 % say they are committed to pass on the entire margin to the consumers. “But falling international oil prices in one or two days will not help in reducing rates. It will depend on the fortnightly average of international petrol price and the exchange rate,” another chairman said.
Average crude oil price for Indian basket was $113.64 a barrel in the first fortnight of September and average exchange rate was Rs 55.47 for a dollar, according to oil ministry`s data keeper, Petroleum Planning & Analysis Cell.
Petrol prices were frozen since July because of Presidential elections and the monsoon session of the parliament. The government, which raised diesel prices by unprecedented Rs 5 a litre from Sept 14, averted a steep hike in gasoline rates by cutting excise duty on the fuel by Rs 5.30 a litre. The duty reduction was also aimed at reducing huge price difference between the two auto fuels that led to dieselization of the economy. Still diesel is over Rs 21.50 a litre cheaper than petrol, which is sold at Rs 68.46 per litre in Delhi.