Petrol price cut by Rs 3 a litre

NEW DELHI: State-run fuel retailers on Tuesday pared petrol price by Rs 3 a litre, marking the fourth - and the steepest - reduction since December, 2008, on the back of a continuous fall in international oil prices and a strengthening rupee. In Delhi, the fuel would cost Rs 63.09 a litre from intervening midnight of Tuesday and Wednesday. In Mumbai, it would cost Rs 69.73 per litre, Kolkata Rs 70.35 and Chennai Rs 65.90. The reductions vary by a few paise due to differences in local tax and freight charges. The retailers had reduced the price by Rs 1.20 on April 16. On March 16, the rates were cut by Rs 2.40 per litre and by Re 1 in the following fortnight. The steepest cut so far was effected in December 2008 when pump price was slashed by Rs 5 after global oil prices almost went into a free fall from a historic peak of $147 a barrel. Indian Oil Corporation, the largest fuel retailer with a little over 50% market share, said international prices have declined from $116.61 per barrel to $107 a barrel since the last reduction. The rupee-dollar exchange rate too improved from Rs 54.51 to a greenback to Rs 54.26. Diesel prices, however, have not been raised though there still remains a substantial gap between its pump price and market rate. The government had in January allowed the fuel retailers to raise diesel price in small doses of 40-50 paise each month till it reaches market rate. But the oil ministry has asked the retailers to hold the price line since it would be difficult to explain the hike to consumers at a time when petrol price was being cut. While petrol price was at par with market rates, politically it would be difficult for people to accept the pricing difference between the two fuels. Besides, with polls in Karnataka scheduled next month, any hike in diesel price would give a handle to the Opposition to beat the UPA government as one who cared only for the rich.   Source: TOI