This Diwali may spring some relief for you as the three oil marketing companies -Indian Oil, BPCL and HPCL - are gearing to announce a reduction in petrol prices by up to Rs 1 a litre anytime soon.
"You can expect some relief in petrol prices soon….the quantum could be within or close to a rupee," a senior minister in Prime Minister Manmohan Singh's cabinet told Hindustan Times.
As reported by HT on November 1, the three fuel retailing companies have been sitting on positive margins of close to R1 per litre but have refrained from announcing any immediate reduction in the consumer prices of petrol.
As petrol is a decontrolled product and domestic price of petrol is fixed in line with the global petrol prices (mostly bench-marked to Singapore prices), oil companies had cited "uncertain movement in rupee-dollar exchange" as the reason for holding back the petrol price cut.
However, as the average movement of rupee against the US dollar has been more or less stable in the past few days, the benefit is likely to be passed on to the consumers anytime soon.
Under the present system of pricing, the oil companies revise prices of decontrolled petroleum products (jet fuel and petrol) every fortnight on the 15th and last day of every month.
Sometimes, the petrol revisions are also announced arbitrary within a week or 10 days.
For the fortnight ending October 31, the oil companies have a over-recovery or profit on petrol of over Rs 1 a litre, which they refrained from passing on to the consumers.