The government’s three oil marketing companies (OMCs) on Tuesday cut petrol prices by Rs 0.78 per litre. It would now cost Rs 65.64 in Delhi against Rs 66.34 earlier. There was a cut of 3.2 per cent earlier this month, too.
The price of aviation turbine fuel has been raised by 3.7 per cent, to Rs 64,622 per kl (Delhi). Meanwhile, losses on retail sale of diesel, kerosene and LPG have moved up.
The petrol cut is the second since the fuel’s price was decontrolled in June last year. A statement from Indian Oil Corporation said, “MS (motor spirit or petrol) prices internationally have moved down significantly from $116 per barrel to $109 (in the current fortnight), while the exchange rate has weakened further from Rs 49.32 to Rs 51.50 per dollar.
The combined impact is an over-recovery (margin) of Rs 0.65 per litre.” With taxes, the cut works out to Rs 0.78.
It, however, added that the trend points to an increasing international price and further weakening of the rupee. This might impact the direction of prices in the next cycle. OMCs review petrol prices fortnightly.
They calculate the price of petrol based on its trade parity (80 per cent import price weight and 20 per cent export price weight) for the previous fortnight.
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Petrol prices have moved up by nearly 39 per cent since decontrol. During the same period, the price of diesel, still regulated, has increased by just 7.37 per cent, to Rs 40.91 per litre.
IOC also said under-recovery or revenue loss on diesel had moved up from Rs 10.17 to Rs 12.03 per litre and on kerosene from Rs 25.66 to Rs 28.56 per litre. On domestic LPG, the loss has widened from Rs 260.50 to Rs 286.50 per cylinder.
The three products continue to be regulated by the government. With the increase in losses on the three, the daily under-recovery of the three government OMCs — IOC, Bharat Petroleum and Hindustan Petroleum — would increase from Rs 348 crore to Rs 452 crore.