State-run oil marketing companies are likely to cut petrol prices by less than Re 1 a litre this week as appreciation in the value of rupee against the dollar has made imports cheaper. This will follow a 75 paise reduction in petrol rates on April 1.
A senior executive at an oil marketing company said Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) can revise petrol rates as early as Tuesday.
"Average rupee appreciation is about 80 paise from the last price revision. International oil prices have also marginally softened. We are waiting for latest data, which are expected on Tuesday after that we will take a call," the executive said on condition of anonymity.
Executives at the three state-owned oil marketing companies said the quantum of price cut could be estimated around 60-75 paise based on available data of international oil prices and the rupee-dollar exchange rate.
According to oil ministry's data-keeper, Petroleum Planning and Analysis Cell (PPAC), crude oil prices have softened about 46 paise and the rupee appreciated by 83 paise against the dollar compared with the last pricing cycle a fortnight ago.
"So far, we have data available up to April 10. But these averages could change in either direction after data for couple of more days are factored in," one PPAC official said.
The government has allowed IOC, BPCL and HPCL to align petrol prices with market rates, but they take tacit approval of the oil ministry before revising fuel prices.
The government still controls pump prices of diesel, a politically sensitive fuel, where companies are still losing revenue of about Rs 5.93 a litre. The oil ministry has recently suspended a Cabinet decision to raise diesel prices by 50 paise every month until its pump prices are aligned with international rates.
"We have approached the Election Commission to hold the monthly hike in diesel prices because the revenue loss on the fuel is below Rs 6 a litre. We are waiting for its reply," an oil ministry official said.
In its March 31 statement, IOC had said that it was not raising diesel rates as "the under-recovery on retail diesel is currently Rs 5.93 per litre, which is below Rs 6 per litre, the interim subsidy cap recommended by the expert group of Kirit Parikh. Hence, the issue of monthly price increase is under consideration of the government and the matter has been referred to the Election Commission. A decision regarding revision of diesel retail price shall, therefore, be taken on receipt of further advice by the government in this context."
Source:- economictimes.indiatimes.com
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