Thanks to the fall in global crude oil prices — currently at an eight-month low of around $98 a barrel — domestic prices of petrol may be cut again by around Rs 1.50-2 per litre.
State-owned oil marketing companies such as Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp are expected to review petrol prices on Friday and pass on the benefits of the falling crude oil prices to consumers, who recently suffered the steepest-ever petrol price hike of Rs 7.54 a litre.
A senior oil company official confirmed the possibility of the price cut but added that “a final decision vests with the company’s management and directions from the government.”
If petrol prices are reduced, this will be the second simultacut after the last reduction of Rs 2 a litre on June 2.
The average price of the Indian basket of crude oil stood at $116 a barrel at the time of the last cut in petrol prices.
It is now ruling at around $107 a barrel (the 10 day average from June 2 till date), thereby making room for prices to come down further by around Rs 2 litre. The dollar-rupee exchange rate, however, is playing a slight spoilsport and has fallen from Rs 54.96 last fortnight to Rs 55.52 for the 10 days period beginning June 2.
International crude oil prices are currently ruling at a 8-month low at around $98 a barrel, extending losses due to fears that the euro zone debt crisis will worsen and hurt the global economic recovery, threatening growth in oil demand.
Optimism over a bailout for Spain’s troubled banks faded because of concerns about the package’s impact on public debt, while uncertainty surrounding elections in Greece on Sunday compounded worries that the financial crisis in Europe will only get worse.