In line with expectations, the state-owned oil companies on Monday announced a substantial cut in petrol prices by Rs. 3.66 a litre (in Delhi after including taxes) – a move that is seen as a major respite for consumers currently battling a season of soaring fuel and food prices.
Diesel rates have been hiked by 57 paise a litre (in Delhi including taxes) as per the practice of increase in rates by small monthly doses to cover losses. While petrol price cut has been made possible because of appreciation in rupee value against US dollar, diesel prices have gone up as losses on the fuel still stand at over Rs. 10 a litre.
Due to difference in local taxes, the reduction for consumers of petrol in Mumbai is far higher at Rs. 4.14 a litre (including taxes). In NCR, the reduction is around Rs. 3.90 a litre (including taxes). The new prices will be effective Tuesday.
Every litre of petrol will now cost Rs. 72.40 a litre in Delhi, Rs. 79.49 in Mumbai, Rs. 75.68 in Chennai and Rs. 79.51 in Kolkata. In NCR, every litre of petrol would cost Rs. 73.72 in Faridabad, Rs73.47 in Gurgaon, Rs. 79.31 in Noida and Rs. 79.17 in Ghaziabad. The new prices will come into effect from Tuesday.
Significantly, this is the first reduction in petrol prices in over five months and the steepest in over five years. Petrol price was last cut on May 1 by Rs. 3 per litre. However, since then petrol prices have been raised or gone up by seven times and in Delhi, after the last price cut in May, petrol prices have surged by Rs. 13.06 per litre after including state tax.
Diesel hike will vary between 57 paise a litre to 64 paise a litre depending on prevailing local taxes in every state. Every litre of diesel will now cost Rs. 52.54 a litre in Delhi and Rs. 59.46 in Mumbai .
The present hike in diesel prices is the ninth since the January 17 and most of the losses on diesel sales should have been wiped out by now to make the fuel market priced. But the fall in rupee, around 25% since April, has worsened the situation and losses mounted to Rs. 14.50 per litre. However, the recent firming of rupee against US dollar has trimmed these losses to Rs. 10.52. Diesel rates have risen by a cumulative Rs. 5.39 this year.
Alongside, oil firms also raised rates of non-subsidised domestic cooking gas (LPG) that households buy after exhausting their quota of nine subsidised or cheaper cylinder. Price in Delhi was hiked by Rs. 71.50 per 14.2-kg cylinder to Rs. 1004.