Monday brought some cheer for the common man as oil marketing companies announced a reduction in the retail selling price of both petrol and diesel, with the international price of crude oil continuing to slide.
This marked the third fuel price cut in August, and the sixth since April. This cut would be effective from 12 am on Tuesday.
Indian Oil Corp, the largest oil marketer, said that while the price of petrol has been reduced by Rs 2 per litre, diesel would cost 50 paise less, per litre. With this change, a litre of petrol will cost Rs 61.20 in Delhi, while diesel would be priced at Rs 44.45/litre.
Global crude oil prices, which have been on a downward spiral since October last year, saw significant volatility over the last week. Last Monday, a meltdown in the Chinese stock markets stoked fears of a global downturn, leading to a sharp decline in the price of crude. However, mid-week, the US Energy Information Administration reported a decline in oil storage levels in the US, which halted the downward spiral.
Retail prices of petrol and diesel were last revised on August 15 — the retail price of petrol was cut by by Rs 1.27 per litre, and that of diesel by Rs 1.17 per litre.
The retail prices of fuel are directly linked to the Indian crude oil basket price, which on August 28 was at $46.88 (Rs 3,097.88) per barrel. Since the last price change, there has been a decrease in international prices of both petrol and diesel. “However, INR-USD (Indian rupee-US dollar) exchange rate has depreciated during this period. The impact of both these factors warrants a downward revision in prices, the impact of which is being passed on to the consumers with this price decrease,” the IOC release said.
The rupee has depreciated against the US dollar to Rs 66.46 from just over Rs 65.2, partially offsetting the gain accruing on account of the decline in crude oil price during the fortnight.