Public sector oil retailers have cut petrol prices by up to Rs 0.83 a litre effective tonight. This second cut in a month is something which both the motorists as well as UPA allies like Trinamool Congress will welcome.

Passing on the benefits of the drop in international product price, the oil retailers have cut the base price of petrol by Rs 0.65 (excluding the taxes). In Delhi, the cut will be about Rs 0.78 a litre on the retail front. The retail price will vary from State-to-State depending on the local levies.

However, airlines will have to shell out more as oil firms have hiked jet fuel price by 3.7 per cent with effect from midnight. Whether they will pass it on to the passengers is yet to be seen.

The oil retailers revise the price on the basis of fortnightly average of international prices. The factors resulting in the revision are generally the international price (f.o.b) of the product and currency fluctuation.

Private oil retailers – Essar and Reliance – generally wait for the public sector retailers – Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum – to revise their auto fuel prices.

In a statement issued here, Indian Oil Corporation said, “Review of international oil prices and rupee-dollar exchange rate of relevant fortnight for prices effective December 1 brings out a further downtrend in international oil prices and a further weakening of the exchange rate. Thus, while international petrol prices have moved down significantly from $116/bbl approximately to $109/bbl, the exchange rate has deteriorated from Rs 49.32 versus dollar to Rs 51.50. It has, therefore, been decided to revise the petrol price”.

However, the company cautioned that the current trend of increasing international petrol prices and further deterioration of exchange rate will impact the direction of prices in the next pricing cycles.

richam@thehindu.co.in

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