IOC hints at up to Rs 1.50 a litre cut in petrol price
Days after raising petrol price by a steep Rs 7.54 a litre, nation's largest oil firm Indian Oil Corp (IOC) hinted at a Rs 1.25-1.50 per litre cut in rates later this week.business Updated: May 28, 2012 19:41 IST
Days after raising petrol price by a steep Rs 7.54 a litre, nation's largest oil firm Indian Oil Corp (IOC) hinted at a Rs 1.25-1.50 per litre cut in rates later this week.
"We will certainly pass on any decline in international oil price to consumers," IOC Chairman R S Butola told reporters here.
Oil companies revise petrol prices on 1st and 16th of every month on the basis of average international oil price and the foreign exchange rate in the previous fortnight.
Gasoline price, against which petrol price has been benchmarked, has come down from $124 per barrel (that was taken into account for the hike implemented from May 24) to $116-117 a barrel.
But rupee has depreciated further against the US dollar -from Rs 53.17 to a dollar to Rs 55.30.
"If there is a downtrend, we would definitely like to pass on to the consumers," he said adding the company would like to follow the policy of fortnightly revision from hereon.
"Every dollar reduction in international oil price translates into a cut in product price by 33 paisa. But every time rupee depreciates against US dollar by rupee one, it translates into a requirement to raise prices by 77 paisa," Butola said.
If the present trend continues for the remaining part of the current month, oil companies will cut petrol price by about Rs 1.25.
"We are hoping that international oil prices will come down. If they come down and rupee does not depreciate, we will pass on the benefit to consumers," he said. "We will pass on the benefit as we had done on November 16 and December 1 after the November 4 petrol price hike".
The oil companies had on November 4 hiked petrol price by Rs 1.80 per litre but followed it up with two successive cuts in rates - Rs 2.22 a litre on November 16 and Rs 0.78 per litre on December 1.