Petrol price likely to be reduced further by Re1 a litre

State-run oil marketing companies are expected to announce a Re1 reduction in the retail prices of petrol, the second in this month.

This is likely to happen this week, which would soften the reaction to the government's economic policies as a whole, including the opening up of the retail sector to foreign  investors.

The prices are most likely to be announced on Wednesday or Thursday, giving some respite for a government faced with rising criticism over rising prices.
 
''In the current price situation, the base price of petrol could be reduced by Rs0.85 a paise (excluding taxes and levies),'' an oil industry official said.

OMCs revise the price on the basis of fortnightly average of international prices. The factors resulting in the revision are generally the international price (fob) of product and currency fluctuation.

Private oil retailers like Essar and Reliance generally wait for the public sector retailers, Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, to effect any revision in auto fuel prices.

Consumers, however, are cautious that the price cut may or may not follow a price hike in petrol.