Petrol prices cut by Rs1.15 per litre, diesel to cost 50 paise more

State-owned oil marketing companies on Thursday decided to reduce the retail price of petrol by Rs1.15 per litre and raise the price of diesel by 50 paise per litre effective midnight.

Accordingly, the retail selling price of petrol will come down by Rs1.15 per litre (excluding state levies) and that of diesel will go up by Rs0.50 per litre (excluding state levies) with effect from midnight tonight.

OMCs had, on 1 October, revised the price of petrol downward by Rs3.05 per litre (excluding state taxes) on account of softening of prices in international markets and the strengthening of the rupee.

Since the last price change, Indian Oil Corp said international prices of crude oil have declined marginally from about $113 per barrel to about $112 per barrel. The rupee-dollar exchange rate has appreciated from around Rs63 per dollar to around Rs62 a dollar.

Both these factors have resulted into a reduction in prices of petrol, the benefit of which is being passed on to the consumer, Indian Oil Corp, the country's top oil retailer, said in a release.

OMCs have been authorised to increase the retail selling price of diesel within a small range every month until further orders. Since then oil companies have been revising retail prices of diesel every month by 50 paise per litre.

Even after the current 50 paise increase, IOC said, under recovery on retail diesel will stand at Rs9.58 per litre.

Indian Oil said it is also losing Rs35.77 per each litre of kerosene sold through PDS outlets and Rs482.50 on each cylinder of LPG sold to domestic consumers under the subsidised quota.

Indian Oil expects to incur under-recovery of Rs71,200 crore on sale of the three sensitive products while the three PSU oil marketing companies together stands to lose Rs1,35,900 crore a year.

IOC said it is closely monitoring the movement of prices in international oil market and the rupee-dollar exchange rate and developing trends in the market will be reflected in future price changes.