The people of India have finally found out some water in the desert as the state-run fuel retailers have reduced petrol prices, excluding local taxes, by 1.85 rupees per litre with effect from Wednesday. However, the petrol prices have been cut by Rs. 2.22 a litre in the national capital.
State-owned oil companies allowed the Rs. 1.85 a litre benefit, which they gained from a decline in global oil prices and a slight appreciation in rupee value, to trickle down to the people. As a result of an additional 20 per cent local sales tax, the fall in Delhi comes to Rs. 2.22 per litre. Therefore, the petrol in Delhi will currently cost Rs. 66.42 per litre as against Rs. 68.64 a litre. The reduction in Mumbai was learnt to be Rs. 2.34 per litre, while in Kolkata and Chennai it was Rs. 2.31 a litre and Rs. 2.35 per litre.
According to sources, the cut down cannot be considered as a rollback, though it is the government that has made an initiative to reduce the skyrocketing petrol prices. Following the decontrol, the oil marketing companies are under no obligation, of any sort whatsoever, while setting the price of petrol.
Explaining the logic behind this move, R.S. Butola, Chairman of Indian Oil Corporation said, “We follow a particular formula based on which we take decisions in the relevant fortnight. That is based on the pricing that prevailed in the previous fortnight. When we increased the prices last time by Rs. 1.50, there was significant jump in the rupee-dollar parity adverse to the rupee."
The sources further stated that the slashing of the prices is the result of political pressure and the problems of the oil companies need to be looked into seriously. Global oil prices suffered a nosedive and if the current trend sustains, along with a maintained value of rupee, a reduction is always on the cards.
This is the first reduction in the fuel prices since June 2010, when it was deregulated. The move would preferably help the government to pacify the widespread uproar and political anger ahead of the winter session of Parliament, scheduled to begin from November 22. It must be noted that the petrol prices have gone up five times since December 2010.
The ministry started to keep a vigilant check on the prices of crude and products in the international markets as well as the rupee's exchange rate after the 3rd November price hike, which invited criticism and public outrage.
Thus, the current fall in the petrol prices has lent some time to the government to revise its plans and policies in the interests of the common man.
