Oil companies put off cut in petrol prices again

The wait over the much-anticipated cut in petrol prices by Rs 2 a litre following the softening of global oil prices is only getting longer.

The wait over the much-anticipated cut in petrol prices by Rs 2 a litre following the softening of global oil prices is only getting longer.

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Citing further depreciation in the value of rupee against the US dollar, state-owned oil companies led by the Indian Oil Corporation (IOC) on Monday ruled out an immediate reduction in petrol prices.

“The negative impact of the Reserve Bank of India (RBI) over not cutting rates and the downgrade of India’s outlook by global rating agency Fitch has seen the rupee slide further,” said a senior oil company official.

“We have decided to wait for a few more days before taking any decision to revise petrol prices.”

The fall in global crude oil prices from an average of $106 a barrel to $97 a barrel had raised hopes of a second straight cut this month after petrol prices were raised by a record R7.54 a litre on May 23.

The increase had triggered public outcry and political backlash even though petrol only accounts for about 10 % of total fuel consumption in India. Indian Oil, Hindustan Petroleum and Bharat Petroleum had over the past one week indicated of a scope of reducing rates on June 15.

As per the practice of revising fuel prices on 1st and 15th of every month, oil companies were to revise petrol price on Monday based on the average international oil price and rupee-dollar exchange rate in the previous fortnight.

Oil firms had last reduced petrol rates by R2.02 a litre on June 3 in a partial rollback of the steep R7.54 per litre hike affected last month.