Petrol prices cut by Rs1.09 per litre; diesel up by 56 paise

State-run oil marketing companies today announced a reduction in petrol prices by Rs1.09 per litre, the second reduction in three-and-half-months, while diesel rates were hiked by 56 paise a litre.

The revisions will be effective midnight tonight, Indian Oil Corp, the nation's largest oil firm, announced today.

Petrol in Delhi will cost Rs72.51 per litre from tomorrow as against Rs73.60 a litre currently. Similarly, diesel will be priced at Rs58.40 per litre from tomorrow as compared to Rs57.84 at present.

During the past fortnight, petrol prices have shown a downward trend while the rupee-dollar exchange rate has slightly depreciated.

The combined impact of the two factors warrants a decrease in the retail selling price of petrol by Rs1.09 per litre at Delhi (inclusive of VAT) with corresponding decrease in other states. The decrease is being effected from midnight of 31 July/1 August, Indian Oil said in a release.

Further, since the price of diesel in international markets has also shown a downtrend, the selling price of diesel sold to bulk consumers (Bulk HSD) will be reduced by Rs0.72 per litre in Delhi (including VAT) with corresponding decrease in other states.

Prices of bulk diesel, which as per government policy is meant for large consumers like state road transport corporations, railways and defence, was last revised on July 16 when rates were cut by Rs 1.09 to Rs 59.32 per litre.

For retail-sale diesel, however, as authorised by the government on 17 January 2013, PSU oil marketing companies have been anouncing a Rs0.50 per litre increase in prices every month.

The Rs0.50 per litre (excluding VAT) increase in retail diesel prices will result in an increase of Rs0.56 per litre in Delhi (including VAT) with corresponding increase in other states.

Indian Oil said international prices of LPG also witnessed a downtrend during this period. As a consequence, the selling price of domestic non-subsidised LPG cylinder will be reduced by Rs2.50 for a 14.2 kg cylinder and that of LPG commercial cylinder by Rs4 for a 19 kg cylinder in Delhi (including VAT) with corresponding decrease in other states.

Oil companies generally announce price revisions without including local levies but today, for petrol, the reduction was announced after including local levies so as to boost up the headline cut.

With local levies, the reduction was about 91 paise a litre. In case of diesel, Indian Oil Corporation announced an increase of 50 paise, excluding local levies. After including local levies, the hike came to 56 paise per litre in Delhi.

The reduction in bulk diesel and non-subsidised domestic LPG rates was also after including local levies so as to give an impression of a bigger cut.