New Delhi: Indian oil marketing companies, led by Indian Oil Corp Ltd, have decided to wait for a few days before taking any decision on further cut in retail petrol prices, primarily on account of rupee devaluation, and will review the situation later this week, media reports said, citing sources.
"The rupee has depreciated and refining margins are also low. We will have to watch this situation on both counts ... We will review prices in a couple of days," the Reuters reported, citing an unidentified source.
The decline in global crude oil prices to $96 per barrel, the lowest in the last one year, has spurred expectations of a second rate cut in the petrol prices, after the oil marketing companies raised petrol prices by a record 11% in May.
But the sliding rupee has become a matter of concern for the oil refiners as it raises input costs for them. The rupee declined to Rs 55.90 against the dollar Monday, the lowest in nearly a week, after the Reserve Bank of India announced the mid-quarter monetary policy review and kept the key interest rate and the cash reserve minimum at banks unchanged.
"The negative impact of the Reserve Bank of India (RBI) over not cutting rates and the downgrade of India's outlook by global rating agency Fitch has seen the rupee slide further," another source told the Hindustan Times.
On May 23, the oil companies Indian Oil Corp, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd hiked petrol prices across the country by a staggering Rs 6.28 per litre excluding value added tax (VAT) and sales tax, raising petrol prices, including taxes, in the capital city by Rs 7.54 per litre to Rs 73.18 per litre.
However, on June 2, the oil companies slashed prices of petrol by Rs 2.02 per litre including taxes in Delhi to cost Rs 71.16 per litre, following widespread protests against the fuel price hike.
The prices fell further by Rs 0.92 per litre to Rs 70.24 per litre after the Delhi state assembly approved removing incremental VAT on the increase in prices of petrol on June 4.