Petrol price cut possible soon, says official

Reduction may provide relief to UPA

“The rate cut is very much in the air as the crude prices have maintained a level in the recent days offsetting the impact of falling rupee,” an official from Indian Oil Corporation (IOC), India’s largest oil retailer, told Deccan Herald.

He, however, stopped short of hazarding a guess on quantum of  rise in petrol prices.
IOC Chairman R S Butola has also maintained that if global crude prices soften, the impact will be passed on to the consumers.

State-owned oil companies raised petrol prices by Rs 1.82 per litre on November 3. This was the fourth hike this year and 13th since the petrol pr­ices were freed in June 2010.

Benchmark prices

The prices of  brent and Dubai crude and Singapore spot petrol price–the combination of the three on which Ind­ia’s petrol price is benchma­r­k­ed—have dropped co­n­siderably, giving oil companies some room to manoeuvre domestic prices.

Price of petrol in Singapore bulk market dropped to $115 a barrel from an average of $125 last month. The rupee has averaged 49.50 a dollar during the same period.

The reduction in oil prices, if at all takes place before the winter session of Parliament, will be a great relief to the United Progressive Alliance government, facing a barrage of charges against rampant corruption in the system.

This will also be the first cut in petrol prices since June 2010, when the government freed petrol from its control.