In a potential development which would be ‘Pre-Diwali’ gift to public, Oil companies are likely cut prices of petrol and diesel by Rs 1.50-2.50 effective from October 15 midnight. With the price of international crude oil falling to over a two-year low of $88 per barrels, the long-awaited cut in diesel prices might just be announced after the counting of Maharashtra and Haryana state polls.
Despite erasing the under-recoveries on sale of diesel on September 16 and the subsequent resultant over- recovery to Rs 1.90, the government has not cut rates due to election code being in force for the assembly elections in Maharashtra and Haryana.
Further, if implemented, diesel rate cut would be the first in five years. Previously, oil companies in January 2009 reduced the diesel prices by Rs 2 per litre to Rs 30.86. Since then rates have only been hiked on the back of rising crude prices in the international market. The rates of diesel have been hiked by 50 paise a litre each month since January 2013 to eliminate under-recoveries by oil marketing companies. Petrol on the other hand, had been deregulated in June 2010 and rates have since then moved every fortnight in line with the cost. Petrol rates were last reduced by 54 paise on October 1 in line with international trend.
However, few reports suggest while the reduction in petrol prices would take place on October 15 as per the practice of fixing rates on 1st and 16th of every month based on average international prices in the previous fortnight, there appears lack of clarify if diesel rate cut might not be done on the same day.
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