Petrol price cut by Rs 5, diesel by Rs 2

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Ambassador of Buzz
As oil traded near four-year lows, the government on Friday cut petrol and diesel prices by Rs 5 and Rs 2 a litre, respectively -- a move that will help tame inflation and foster easy money policy to push growth.

As an interim measure, the government has decided to cut the prices with effect from midnight tonight, Petroleum Minister Murli Deora said in New Delhi after a meeting with Prime Minister Manmohan Singh.

Although there is no change in the prices of LPG (cooking gas) and kerosene, the government would continue to watch international crude prices before effecting further cuts.

The government had in June raised the prices of petrol and diesel by Rs 5 and Rs 3 a litre, respectively, and that of LPG by Rs 50 a cylinder to protect oil

marketing firms against losses on account of a rally in crude prices.

The hike had then propelled inflation to double digits and stayed so for five months. Inflation cooled to 8.40 per cent as of November 22, but is still above the Reserve Bank of India's tolerance level.

Crude oil subsequently climbed to a record high of $147 a barrel in July, but has now come to $43.5, a four-year low.

Today's decision will have a revenue implication of Rs 5,798 crore (Rs 57.98 billion) for oil marketing companies this fiscal.

Under-recoveries of OMCs as of today were calculated at Rs 98,512 crore (Rs 985.12 billion) and this will now increase to Rs 1,04,310 crore (Rs 1,043.10 billion).

Prior to the reduction, state-run oil firms were earning a profit of Rs 14.89 a litre on petrol and Rs 3.03 on a litre of diesel. However, they continue to sell kerosene at a loss of Rs 17.26 a litre and Rs 148.89 on every LPG cylinder.



99.9% Idle
Looks like Petrol is cheaper than LPG now considering the running cost.
Petrol - Rs.50
LPG - Rs.39

Arun the Gr8

Not a welcome move at all. Already the govt has subsidised petrol and since the common man was now used to the Rs 50 tad of petrol, the govt should have saved some money and use it to better up our economy. The rupee in now fluctuating at Rs 50 (+- 20 paise).
This is a face saving gimmick by the Govt.
Although fuel prices have dropped across the globe, the terror attacks in Mumbai have taken centre stage and so no matter what the Govt does to appease voters (that includes this price cut and the controversial 6th Pay commission), the terror attacks will deal the final crucial blow against them.


Not a welcome move at all. Already the govt has subsidised petrol and since the common man was now used to the Rs 50 tad of petrol, the govt should have saved some money and use it to better up our economy. The rupee in now fluctuating at Rs 50 (+- 20 paise).

Seems you don't know that elections are going to be held in near future.


Ambassador of Buzz
Petrol cheaper by Rs 5, diesel Rs 2, LPG Rs 25

For the second time in as many months, the Government on Wednesday night cut petrol price by Rs 5 a litre and diesel by Rs 2 per litre, while the domestic LPG rate was also slashed by as much as Rs 25 per cylinder.

"The Cabinet Committee on Political Affairs headed by External Affairs Minister Pranab Mukherjee decided to reduce petrol, diesel and LPG prices to pass on the benefit of softening international oil prices to consumers," Petroleum Minister Murli Deora told media-persons in New Delhi.

The reduction will be effective from midnight Wednesday,Mukherjee said.

"We are giving relief to housewives," Railway Minister Lalu Prasad said pointing to the cut in the cooking gas price. The reduction comes on back of the Rs 5 a litre cut in petrol price and Rs 2 per litre cut in diesel price on December 6 last year.

The reduction will help further ease inflationary pressures and benefit the common man.

Petrol in Delhi will cost Rs 40.62 a litre instead of the present Rs 45.62 per litre, while diesel will be sold at Rs 30.86 per litre as against current Rs 32.86 a litre. Similarly, a 14.2-kg domestic LPG cylinder will now cost Rs 279.70 in place of Rs 304.70.

While state-run oil firms were making a neat Rs 9.86 a litre profit on petrol before this price reduction and Rs 3.48 on every litre of diesel, they were still losing Rs 32.97 per LPG cylinder and Rs 12.16 per litre of kerosene. The reduction could have been sharper but for the losses on LPG and kerosene.

Petroleum Secretary R S Pandey said no decision on raising excise and customs duty to mop up any extra revenue has been taken. Also, the parallel proposal of freeing petrol and diesel prices from administrative control has not been acted upon.

"The Government," he said, "will made good all of the losses of state-run retailers after accounting for Rs 32,000 crore contribution from upstream firms, through issue of oil bonds."



Beyond Smart
It was around 49 in Mumbai, so petrol should be now approx 44!
Diesel was 36.69 and it will now be 34.69!
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