Good times may not last long, warns IndianOil
Mumbai   02-Jul-2012

State-run fuel retailers on Thursday cut petrol price by Rs 2.46 a litre, excluding state taxes. Reacting to the cut, Trinamool chief Mamata Banerjee said the cut was with on the presidential polls. The price has come down because of the presidential poll. They will increase it later. The price of crude oil has decreased by Rs 100,so the price of petrol should have been cut by Rs 10 to Rs 30 per litre, she said.

Thursday’s announcement broke the cycle on 15th and last day of each month that fuel retailers have been following so far to revise petrol price. On June 16, TOI had first reported the move that is aimed at ending market speculation and hoarding by dealers. Every fortnight, there were reports about dealers hoarding or not lifting stocks from the companies depending on whether the price was going up or down. Consumers, too, would rush for a refill the evening before a hike was expected, creating chaos at petrol pumps and a spike in demand. The government is examining the option of a daily or weekly price revision, as first reported by TOI on Thursday.

On its part, market leader IndianOil warned that the good times may not last long as the fall in rupees value against the greenback remained a cause for worry. It also said crude prices had dropped to unsustainable levels as global economic worries pulled down demand for fuels.

Pump price of petrol in India is set directly in accordance with the fuels price in the regional trading hub in Singapore. The price of motor spirit/gasoline trade name for petrol has come down to $106- $107 a barrel from $115.81 when petrol price was cut last on June 2.But the rupee-dollar exchange rate has worsened to 56.20 from 54.96 in the same period.

No wonder, IndianOil said it would continue to closely monitor the international prices and the evolving scenario in the rupee-dollar exchange rates to assess their potential impact on selling prices in future.