Petrol, diesel rates likely to be reduced by up to Rs 2 per litre: Report

By Team Newsable | First Published Nov 2, 2022, 10:54 AM IST

The prices of petrol and diesel may be reduced by up to Rs 2 per litre by oil marketing companies (OMCs). This comes as international crude prices are falling and rising product margins for retailers.

While there has been no change in petrol or diesel prices in the last five months, consumers should soon see a reduction of up to Rs 2. The fuel price cut was announced as the first since May 22, when the Centre reduced excise duty on petrol and diesel by Rs 8 and Rs 6, respectively.

While oil marketing companies notified dealers of a price cut in fuel prices on Monday night, the decision was reversed on Tuesday morning, and no price change was reported.

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According to brokerages, retailers reported losses of Rs 10 per litre on petrol and Rs 14 on diesel sold during the April-June quarter due to the excise duty cut announced in late May. During that quarter, Indian Oil, Bharat Petroleum, and Hindustan Petroleum collectively lost Rs 19,000 crore.

Now, there may be some relief soon, as dropping international crude and product prices have turned retailers' margins positive on petrol by Rs 6 per litre, and an under-recovery of Rs 10 on diesel is expected to be eliminated soon. According to reports, if oil and the rupee stay at their current levels, consumers could soon see petrol and diesel prices drop by up to Rs 2 per litre.

It remains to be seen whether the reduction will be gradual or abrupt. The oil market remains volatile, despite being much lower than it was during the early days of the Ukraine conflict.

Meanwhile, in Delhi, petrol remains at Rs 96.72 per litre and diesel at Rs 89.62 per litre. Petrol costs Rs 106.31 per litre in Mumbai, while diesel costs Rs 94.27 per litre. Petrol costs Rs 102.63 per litre in Chennai, and diesel costs Rs 94.24 per litre. Petrol costs Rs 101.94 per litre in Bengaluru, while diesel costs Rs 87.89 per litre.

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