India’s largest fuel retailer, Indian Oil Corporation, said in a statement, the reduction was possible as the decline in international rates of the fuel outweighed the drop in the rupee. “The combined impact of the two factors is an over-recovery of Rs 0.65 per litre (excluding taxes),” the statement said.
The price of petrol averaged about $109 a barrel in the second fortnight of November, over 5 per cent less than the $114.14 a barrel in the previous 15 days. The last time the OMCs had cut petrol price was on November 16. The reduction was by Rs 1.82 a litre.
Petrol has a 1.09 per cent weighting in the overall wholesale price index basket and a price cut by Rs 1.80 a litre means easing of headline inflation by 0.27 percentage point.
The reduction in price has come in spite of a drop in rupee against the dollar in past two days and firmed up crude prices in the global market. Oil firms were expected to slash prices by Re 1 a litre, but expensive rupee vis-à-vis dollar in the past couple of days may have held them back, oil experts say.
Petrol price in City
Old Rate: 74.36
New Rate: 73.51