Petrol prices may be revised on Friday with companies talking about a scope of cutting rates by Rs 1.50-1.60 a litre.
Indian Oil, Hindustan Petroleum and Bharat Petroleum had over the past one week indicated of a scope of reducing rates from June 1.
The three firms, as per practice, were to revise rates of petrol on Thursday based on average international oil price and rupee-US dollar exchange rate in the previous fortnight.
With international gasoline rates, against which petrol is benchmarked, falling to $114-115 from $124 (that was taken into account for the steep Rs 7.54 a litre hike effected from May 24), there existed a scope for reducing prices by Rs 1.50-1.60 a litre.
Sources said the oil companies may take a call on Friday on the quantum of reduction considering that rupee has depreciated further against the US dollar - from Rs 53.17 to a dollar to Rs 55.30. Rupee depreciation raises cost of imports.
Every dollar fall in oil price should translates into a cut in product price by 33 paisa. But every time rupee depreciates against US dollar by Re one, it translates into a requirement to raise prices by 77 paisa.
The government should restructure prices of petrol to avoid increase in prices now and then, senior BJP leader and former Union minister of petroleum Ram Naik has said.
"The burden of petrol price hike petrol can be reduced by suitably adjusting import duty and excise duty instead of reducing them," Naik, told reporters in Nagpur on Thursday.
He said Union finance minister Pranab Mukherjee seemed only interested in augmenting government revenue. The government can adopt a revenue-neutral policy and pass on additional revenue to customers, thereby helping reduce petrol prices.
Criticising the UPA policies, Naik said unfortunately the Manmohan Singh government had no clear cut policy on petroleum. Claiming petrol prices in neighbouring countries like Sri Lanka, Pakistan and Bangladesh were quite less, he said even in the US, petrol was cheaper by Rs 24 as compared to India.
Advocating 5% blending of ethanol with petrol, Naik said had the government seriously followed a decision taken by the then government in 2003 on blending, they would have been spared of raising prices.