Indian Oil Corporation (IOC) has announced a price cut of 75 paise per litre for petrol. The revised prices for petrol came into effect from midnight of March 31, while the monthly hike of diesel prices has been currently put on hold. Petrol prices were last revised on March 1, when it was increased by 60 paise per litre and this is the first reduction in five months. The 60 paise price cut excludes VAT and local sales tax and the effective cut for every city might be higher.
The new prices in New Delhi has gone down from Rs 73.16 to Rs 72.26, a reduction of 90 paise, while those in Mumbai have been revised from Rs 82.07 to Rs 80.89, a cut of Rs 1.18.
Fuel prices in India rely on the fluctuation of oil prices in the international market and the Rs-USD exchange rate. IOC said that the strengthening of the Indian currency in the international market as well as the dip in international oil prices have influenced this price cut.
A regulation passed by the Government in January 2013 permitted state-owned oil firms to hike prices of diesel every month, which has resulted in an increase of Rs 8.33 over the last 14 months. But now, with the under-recovery on diesel dipping below Rs 6 per litre threshold, consumers have been spared a price hike of diesel for April and the matter of price revision has been referred to the Election Commission. The cut though minimal, is nevertheless, welcome.
