Government likely to further reduce prices of petrol, diesel

A cabinet committee on economic affairs (CCEA) meeting this evening is expected to take a decision on further reducing the prices of petrol and diesel by Rs4 and Re1 a litre, respectively.

The government may cut fuel prices by up to 11 per cent, its second cut in nearly two months, as New Delhi tries to pass on the benefit of cheap crude oil to consumers ahead of the general elections.
 
The government had cut petrol prices by Rs5 and diesel prices by Rs2 per litre in December after prices of crude oil fell to levels around $40 a barrel from around $147 a barrel in July last year.

Petroleum minister Murli Deora said the union cabinet would consider cutting prices later in the day, but he did not elaborate.

''This will be discussed by the cabinet in the evening. The decision will be announced," he said after meeting foreign minister Pranab Mukherjee, who is also the acting finance minister after prime minister Manmohan Singh underwent heart surgery last week.

Petrol is currently being sold at Rs45.62 a litre in New Delhi while diesel is being sold at Rs32.86. These would come down to Rs41.62 and Rs31.68 respectively.

The government, meanwhile, is also expected to announce freeing of fuel prices from administrative controls, official sources pointed out.