New Delhi- Petrol and diesel prices were cut by Rs 2 per litre each on Friday, a day before the model code of conduct for the general election kicks in.
This is the first revision in rates in nearly two years.
Petrol in the national capital will now cost Rs 94.72 a litre as compared to Rs 96.72 per litre previously while the price of diesel will be Rs 87.62 as opposed to Rs 89.62, a price notification of state-owned fuel retailers said.
The price cut came a week after a Rs 100 per cylinder reduction in cooking gas LPG price and a Rs 2.50 per kg cut in CNG rates was announced.
The LPG price reduction brought down the rates of LPG for common users to Rs 803 per 14.2-kg cylinder and that for the poor who got free connections under the Ujjwala scheme to Rs 503 after accounting for Rs 300 per bottle subsidy that the government gives.
The cut in petrol and diesel prices was announced by the oil ministry last evening, saying it will be effective from 06.00 am on Friday.
Petrol in Mumbai now costs Rs 104.21 per litre, Rs 103.94 in Kolkata, and Rs 100.75 in Chennai.
A litre of diesel comes for Rs 92.15 in Mumbai, Rs 90.76 in Kolkata, and Rs 92.34 in Chennai.
Rates differ from state to state depending on the incidence of local taxes.
Local sales tax or VAT is the highest among metros in BJP-ruled Maharashtra and lowest in Delhi.
Commenting on the petrol and diesel price cut, Emkay Global Financial Services said while the Ministry of Petroleum and Natural Gas’ X handle first reported oil companies taking the decision themselves, “the government’s influence can be felt, given the fact that it has happened just before the announcement of election dates and model code of conduct”.
“In our view, this cut will be effective for next 2-2.5 months and once national elections are over, we would return to a normalised margin scenario, with higher opex (operating expenditure) over the years likely to set margins higher than Rs 3-4 per litre. Deepening deregulation with resumption of daily pricing should likely pass any USD 5-10 a barrel movement in oil prices,” it said.
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