Government’s Oil Marketing Companies (OMCs) reduced Petrol Prices by Rs 0.78 per litre

The government’s three oil marketing companies (OMCs) on 29 November 2011 cut petrol prices by Rs 0.78 per litre. It would now cost Rs 65.64 in Delhi against Rs 66.34 earlier. Earlier in November 2011 there was a cut of Rs 3.2 per cent in petrol prices.

Losses on retail sale of diesel, kerosene and LPG was moved up.The petrol cut is the second since the fuel’s price was decontrolled in June 2010.

The price of aviation turbine fuel was raised by 3.7 per cent, to Rs 64,622 per kl (Delhi).

Motor spirit or petrol prices internationally moved down significantly from $116 per barrel to $109 (in the current fortnight), while the exchange rate weakened further from Rs 49.32 to Rs 51.50 per dollar. The combined impact resulted in an over-recovery (margin) of Rs 0.65 per litr.

Price of petrol is callculated on the basis of its trade parity (80 per cent import price weight and 20 per cent export price weight) for the previous fortnight.

Petrol prices have moved up by nearly 39 per cent since decontrol. During the same period, the price of diesel, still regulated, increased by just 7.37 per cent, to Rs 40.91 per litre. Under-recovery or revenue loss on diesel had moved up from Rs 10.17 to Rs 12.03 per litre and on kerosene from Rs 25.66 to Rs 28.56 per litre. On domestic LPG, the loss widened from Rs 260.50 to Rs 286.50 per cylinder.

Petrol has a 1.09 per cent weighting in the overall wholesale price index basket and a price cut by Rs 1.80 a litre essentially implies easing of headline inflation by 0.27 percentage point.