Tuesday, December 16, 2014
By Manoj Kumawat
Price of petrol and diesel slashed by Rs. 2/- litre 8th time during 4 months
State-run oil marketing companies (OMCs) slashed fuel rates by Rs 2 per litre effective Tuesday, sending pump prices of petrol to a 45-month low and diesel to the least in the last 17 months. This is the eighth consecutive reduction in petrol prices in the last four months and the fourth in diesel since October 18, when the Cabinet deregulated the fuel, oil company executives said.
Companies last cut petrol prices by 91 paise a litre and diesel by 84 paise on November 30 because of falling international oil rates.Brent crude hit a fresh five-year low of about $60 per barrel during Monday's trade. Global oil prices are on a steady decline since June from a level of about $115 a barrel. Oil industry experts said the price cut would have been sharper but for a depreciation in the value of the rupee against the dollar. "The international prices of both petrol and diesel have continued to be on a downtrend. The rupeedollar 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," Indian Oil Corp (IOC) said in a statement. India imports about 80% of the crude oil it processes and pays in dollars.
The government has also benefited from falling oil prices besides passing on the benefit to the customer. It twice raised excise duty on petrol and diesel to meet its fiscal deficit target of 4.1% of gross domestic product (GDP) in this financial year. The two duty hikes are expected to generate additional revenue of about Rs 11,000 crore to the exchequer in the remainder of the financial year, government officials said. The government first raised excise duty on the two fuels by Rs 1.50 a litre on November 12. In less than one year, it again raised excise duty on petrol by Rs 2.25 a litre and Rs 1 on diesel on December 2.
Courtesy: Economic Times