There is good news for automobile and two-wheeler riders and lovers this Diwali. On the occasion of the onset of the festive season, the price of fuel has been dropped by a notch. Petrol rates have witnessed a record dip in the last 16 months just before Diwali as state oil merchants and firms have decided to cut down the prices by 1 INR. This is because of the fact that the Brent crude has dropped almost by a margin of 20 per cent from its June high point. As reported by the industry and government sources, the Brent crude has been steadily dropping its rates after its mid-year peak. The Government is also under consideration whether to drop the rates of diesel, as well. This is mainly because of the fact that retailers are gaining 3 INR per litre more than the market rates. A meeting will be held by HPCL, BPCL and Indian Oil Corporation (IOC) to decide on the final slashing of rates. However, the price slash on diesel rates will only be function if the Cabinet approves of it. As a result, it will be possible only after the assembly elections.
The rates of petrol were declared free from price control during the summers of 2010 and also simultaneously, the decision to deregulate diesel prices were to be taken in the near future. There was a permission from the government to the state-run marketing firms to raise the price of diesel in a gradual process to align themselves with the market rates.
The sales of diesel have been revenue positive right from September; still the government has been a bit too precautious because of its volatility. According to the sources, the oil ministry is waiting for the go-ahead from higher up. The petroleum products, their demands and prices in the western countries have a direct influence in the up and down of Indian rates. As a result, a slight miscalculation and there are chances of the prices shooting up. Also, the price of petroleum products influence inflation, which has made the government take careful steps.
