Global crude price fall led to petrol rate cut, says IndianOil
New Delhi   16-Mar-2013

The country's biggest fuel retailer IndianOil announced a Rs 2 per litre reduction in petrol prices on Friday evening. Hindustan Petroleum and Bharat Petroleum are expected to follow suit shortly but would maintain a difference of 2-3 paise a litre to avoid charges of cartelization by private refiner-marketers such as Reliance and Essar.

The state retailers, however, did not raise diesel price in line with a government directive in January that envisaged ramping up pump price in small doses of 50-60 paise a litre every month till it aligns with the market.

Diesel pricing is politically sensitive since it is the main fuel for transport and farming sectors. So any revision has a cascading effect on cost of daily living.

No wonder, the Opposition parties had disrupted a day's Parliament proceeding when state retailers raised the fuel's price on March 2.

The cut in petrol price follows two rounds of hike in rates since February. Petrol price was hiked by Rs 1.50 a litre on February 16 and then by Rs 1.40 per litre from March 2. Both the increases were excluding local VAT.

IndianOil said the reduction in petrol rate was possible as international price of crude oil has declined from $112.73 per barrel to $107.41. This has also narrowed the gap between diesel's pump price and market rate. Losses on diesel have come down to Rs 8.64 per litre from Rs 11.26 at the beginning of the month, the company said.