Diesel price may come down for the first time in 7 years

Diesel prices, which have been going up for the past seven years, will see the first reduction with the price of benchmark Brent crude falling below $100 mark.

The price of the Indian crude basket also fell to $98.11 per barrel. In rupee terms, the price of Indian basket of crude on Monday decreased to Rs5,912.11 per barrel compared to Rs6,023.45 per barrel on Friday. The rupee also closed stronger at Rs6,0.26 per dollar, further denting the price of crude oil for Indian refiners.

The government is now expected to announce a reduction in the retail price of diesel on 15 September, when state-run oil marketing companies review fuel prices.

Diesel prices were last hiked on 31 August by 57 paise, in line with the January 2013 cabinet decision to raise rates in small doses every month to bridge the difference between retail selling price and cost. The difference, which is called under-recovery, had also come down to just 8 paise a litre after the last increase.

Diesel currently costs Rs58.97 per litre in Delhi.

With Brent crude oil prices dipping below $100 per barrel, petrol prices may also be cut by Re1 a litre, official sources said on Tuesday.

This will be the fourth straight reduction in petrol price since last month. Rates were last cut by Rs1.82 a litre on 31 August. Prior to that, petrol price was cut by Rs1.09 a litre on 1 August and again by Rs2.18 a litre on 15 August.