New Delhi: Indian oil marketing companies may slash prices of petrol by up to Rs 4 per litre from July 1, if global crude oil prices, which have seen a significant fall in the past few weeks, continue to remain at the current level of about $90 per barrel, The Hindustan Times reported Wednesday citing unidentified officials.
The price cut will come as a huge relief to consumers after the oil marketing companies raised prices of petrol by a staggering Rs 6.28 per litre excluding value added tax (VAT) and sales tax on May 23, although they rolled back the prices by some amount in June following widespread protests led by political parties.
Oil marketing companies -- Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd -- may have gone for higher cut in petrol prices if the rupee had not seen a steep fall against the dollar recently, the officials said.
Rupee devaluation is countering gains that India could have made from imports of international crude oil on account of falling prices. India meets 80% of its oil requirements through imports.
Brent crude fell to below $90 per barrel last week, the lowest in the last 18 months after touching a peak of above $128 per barrel in March. Rupee, however, has been slipping against the dollar and touched a new low of 57.32 Friday.
Every one-dollar fall in international global prices leads to drop in domestic prices by around Rs 0.34 per litre, while the prices rise by 75-80 paise a litre with every one-rupee fall against the dollar, the daily said.
Meanwhile, The Times of India, citing government officials, Wednesday said the oil ministry is in talks with oil marketing companies to push them to revise petrol prices every day on account of movement in global crude oil prices and rupee-dollar exchange rate.
The government has asked the country's largest fuel retailer Indian Oil Corp to prepare a note on the concept, The Times of India reported.
"The idea is very much on the high table. But a formal proposal is yet to be drawn up," the ministry source told the paper.
The state-run oil companies revise petrol prices on 1st and 15th of every month depending on average imported cost and foreign exchange rates of the previous fortnight.