State-owned oil marketing companies on Tuesday cut petrol price by Rs 1 a litre without including local taxes due to fall in international crude oil prices. In Delhi, after including VAT the decrease in petrol prices comes to Rs 1.21 per litre to Rs 66.65 per litre. There will be corresponding decrease in petrol prices in other states also, depending upon local states.
This is second cut in petrol price in October. Petrol prices were cut by Rs 0.65 a litre (including VAT) at Delhi with corresponding decrease in other states on 1st October. While oil companies are making a profit on the sale of diesel of over Rs 1.90 a litre, a decision on its price cut will be taken only after the state elections in Maharashtra and Haryana due to model code of conduct.
State owned companies were able to cut petrol prices because the decision to deregulate petrol was taken long back in 2010. On the other hand on January 17, 2013, the cabinet only allowed a monthly increase in diesel price of Rs 0.40 to Rs 0.50 per month to wipe out the under-recovery. However, now to cut diesel prices, the cabinet will have to take a decision.
“The government will take the right decision at the right time,” oil minister Dharmendra Pradhan said on diesel price cut. He said that, “as you are aware, election code of conduct is in place so will decide on the issue at the right time.” There has been a sharp decrease in crude oil prices in recent days.
This despite fears earlier that the civil war in Iraq will result in surge in its prices. During the initial stages of Iraq civil war, crude oil prices had increased with Indian basket of crude oil price reaching around $12 a barrel.