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Petrol prices may be cut by 60 paise

business Updated: Nov 12, 2011 00:42 IST
HT Correspondent
HT Correspondent
Hindustan Times
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A 60-80 paise reduction for a litre of petrol could be coming your way next week, following the easing of prices in international markets.

"If the rupee continues at current levels and if spot prices of petrol continue to average $115.80 (Rs 5,794.63) a barrel against last fortnight's average of $121 (Rs 6,054.84) a barrel, oil companies may reduce basic prices by at least 60 paise a litre," a top oil company official said.

"The reduction could go up to 80 paise a litre if international petrol prices fall further."

If petrol prices fall from their current perch of Rs 68.64 a litre in Delhi, it would be the first since June 2010, when petrol was deregulated.

A series of 13 hikes since then has drawn public outcry and political criticism.

The reduction in petrol prices will also bring cheer to the UPA's most important ally, the Mamata Banerjee-led Trinamool Congress, which had threatened to withdraw support on this issue last week.

The government is clearly under pressure. The finance ministry on Friday released a Rs 15,000-crore subsidy to help the three oil marketing companies make up for their losses on sale of petroleum products, including diesel, cooking gas and kerosene, a senior official told Hindustan Times.

The troika of Indian Oil, HPCL and BPCL posted huge quarterly losses of more than Rs 15,000 crore for the July-September period of the current fiscal and this subsidy could help provide them money to buy oil for their refineries and keep fuel supply pipelines running.