Petrol gets cheaper by 78 paise
New Delhi   01-Dec-2011

Petrol is cheaper by 78 paise per litre in Delhi from Thursday, belying market speculation of a major price reduction due to a sharp fall of $7 a barrel in international petrol rates. IndianOil, the biggest fuel retailer in the country said the rupee depreciation had offset gains of falling international petrol prices.

"While MS (petrol) international prices have moved down significantly from $116/barrel approx to $119/barrel, the exchange rate has deteriorated from Rs 49.32/dollar to Rs 51.50/dollar," it said in a statement. The three state oil companies had reduced petrol prices by Rs 2.22 a litre last fortnight after the international petrol rates dropped by $5.74 a barrel at an exchange rate of Rs 49.32 for $1.

Executives of IndianOil, Bharat Petroleum and Hindustan Petroleum said petrol prices would now fluctuate every fortnight. ET had reported it first on November 17. Earlier, state oil firms used to review petrol rates every fortnight but did not raise or reduce its prices in every two weeks under political considerations. As a result, petrol prices had moved only in the upward direction since it was deregulated in June last year. The transparent mechanism of fortnightly revision is followed since November 15 after the oil Ministry decided to delink it completely from politics.

"People should now be prepared for fortnightly revision. Petrol prices may go up or down depending on its international price and exchange rate," IndianOil chairman RS Butola told ET. He brushed aside people expectations for a higher cut.

"We are not working on people's expectation but we take the pricing decisions on the basis of a transparent system. In fact, we are selling petrol at par with crude oil despite considerable value addition," he said. Normally, global petrol rates are higher than crude oil prices but this is an unusual year when petrol at times became cheaper than the raw material, he said. Currently global crude oil and petrol rates for Indian refiners are the same.