Petrol price likely to be slashed by Rs 2/litre soon

  • HT Correspondent, Hindustan Times, New Delhi
  • |
  • Updated: Aug 12, 2014 23:22 IST

The creeping increase in your monthly diesel bill may end by October on the back of declining global oil prices. Also, petrol prices are expected to be slashed by Rs 2 per litre shortly, the steepest cut in many months.

“The fall in global oil prices is expected to wipe out the losses of oil companies on diesel sales by end-September. Thus, the monthly hikes of 50 paise per litre that started from January 2013 may not be necessary anymore,” said a senior oil company executive. Oil companies are currently losing Rs 1.33 for every litre of diesel sold.

The government had permitted oil companies to increase diesel prices by 50 paise every month to bridge the gap between their selling price and their cost to progressively bring down their losses. With the benchmark Brent crude oil, which India imports, touching its lowest level of $104 a barrel in nine months, it is expected that losses on diesel may get completely wiped out by September.

This will also pave the way for de-regulation of diesel prices—a move that will free diesel prices and align them with prevailing oil prices in the international markets.

Petrol prices are already deregulated and are revised every fortnight in line with prices prevailing in the global oil markets. Oil companies had announced a cut of Rs 1.09 a litre in petrol prices on August 1.

“Thanks to the continuous fall in global oil prices, petrol prices may be cut again, for the third time in the past four months,” the executive said.

In Delhi, petrol is currently being sold at Rs 72.51 per litre while diesel is priced at Rs 58.40 a litre. In Gurgaon, they cost Rs 73.90 per litre and Rs 57.14 per litre, while in Noida they cost Rs 80.23 per litre and Rs 63.89 per litre, respectively.

 

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