Petrol prices may fall by Rs 2.50 by Independence day
Rajeev Jayaswal, ET Bureau Aug 12, 2014, 01.05AM IST

Tags:
Rupee|Petrol|ONGC|gasoline

(The cut may be steeper if...)
NEW DELHI: Petrol prices are likely to fall to the lowest in one year on Independence day as state oil firms are planning to cut the fuel's rate by Rs 2.50 per litre, the biggest fall in many months, government and industry sources said.

Petrol would fall to about Rs 70 per litre. The cut may be steeper if the downward trend in international petrol rates continues and rupee appreciates against dollar by August 15, when fortnightly review of prices is due.

"But for weakening of the rupee, petrol would have been cheaper by about Rs 3 per litre. So far this month average depreciation in rupee against dollar is over 70 paise, one source said. Average international gasoline price has slumped by about $7.5 per barrel compared to the previous fortnight, sources said.

This will be second consecutive petrol price cut in a month. Companies reduced the fuel rate by Rs 1.09 per litre in Delhi from August 1 for the first time since mid-April. Currently petrol is sold at Rs 72.51 per litre in Delhi.

Revenue losses will go up marginally from current Rs 1.33 per litre, sources said. Meanwhile, the oil ministry is preparing to approach the Cabinet soon with a comprehensive fuel pricing reform plan that would end uncertainty over subsidy sharing by state explorers such as ONGC. ET reported it first on July 23. The ministry is considering a proposal of upstream companies to retain minimum $65/barrel revenue, sources said.