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Oil firms, state govts step in to douse petrol fire

business Updated: May 25, 2012 09:49 IST
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A day after the steepest ever petrol price hike of Rs 7.54 sparked protests by UPA allies and Opposition parties in several parts of the country on Thursday, there were strong indications that the government would cushion the blow for the common man.

Petrol prices may come down by Rs 3-4 a litre in the next few days as state governments readied plans to slash local taxes and oil companies hinted that if the current softening of crude prices continues, it would prompt them to reduce retail prices of the precious fuel.

Congress-ruled Kerala and Uttarakhand on Thursday reduced local taxes on petrol, which will bring retail prices down by Rs 1.63 per litre and Rs 1.87 per litre, respectively. Other states, including Delhi, are likely to follow suit.

Oil companies indicated that they may soon cut prices by Rs 1.50. http://www.hindustantimes.com/Images/Popup/2012/5/25_05_12-mumbai.jpg

Petroleum minister S Jaipal Reddy cut short his visit to Turkmenistan by a day to arrive in the Capital amid the intensifying political backlash.

With the Congress stepping up pressure on the government for a rollback, Reddy assured the party leadership that he would talk to the oil companies.

"The party is hopeful that some kind of a modus operandi involving the Centre, states and oil companies will be arrived at. We are hopeful that the government would find a way out to provide relief to the common man," Congress spokesperson Manish Tewari said.

RS Butola, chairman and managing director of Indian Oil Corporation, said, "The current trend (in international prices) indicates that prices (of petrol) can come down."

Railway minister Mukul Roy skipped the cabinet meeting in Delhi and led a Trinamool Congress march in Kolkata to protest against the steep hike.

Union minister MK Alagiri (DMK) skipped the meeting too. The NCP said agriculture minister Sharad Pawar was abroad and Praful Patel had already informed the cabinet he wouldn't be attending the meeting.