Petrol price across the country will come down by Rs 2.46 per litre with effect from Thursday midnight and in Bangalore the price reduction will be Rs 3.22.
A litre of petrol will now cost Rs 76.39 in Bangalore, while outside the City, the rate is Rs 75.84.
This is the second time in a month that fuel prices have been slashed. On June 3, oil companies had announced a reduction of Rs 2.02 per litre.
In a statement issued on Thursday, Indian Oil Corporation announced that “the downward revision shall vary from Rs 2.46 per litre to Rs 3.22 per litre, including state levies, depending upon the state taxes.”
Price of fuel in states will vary in accordance with the value added tax and sales tax. Several states had eased the taxes to take the load off the consumers after the biggest ever hike in fuel prices last month.
However, the recent revisions have partially negated the impact of the Rs 7.54 hike on May 23. Oil companies believe that the price could have been wavered further had the value of rupee not witnessed catastrophic falls recently.
The value of rupee now stands at 54.96 against the dollar, which is the lowest exchange rate in the currency market.
Rupee recovery
There are no signs in significant recovery of rupee value so far, even as the Reserve Bank of India, in its Financial Stability report released on Thursday, admitted that “..worsening global economic and financial conditions and muted capital flows have exerted downward pressure on the rupee.”
The average global price of crude oil has dropped from $115 a barrel on June 2, to $ 99 a barrel now. Petroleum Ministry officials believe that fuel price can come down further, depending on the global market.
Earlier, speculation was rife that petrol price will be slashed during the middle of the month.
But the state-owned oil companies have given up the practice of revising rates on 1st and 16th of every month to prevent dealers from exploiting the consumers citing fluctuating market situation. From now on, rates will be revised randomly.
In a common practice across the country, petrol pumps decline supply from oil companies if a reduction in price is anticipated, thus creating an artificial scarcity.
Similarly, if an increase in price is expected, petrol pump owners start stocking fuel, sources in oil companies said.