As international oil prices slumped to five-year low, Petrol and diesel prices have been further cut by Rs 2 per litre each. This was the eighth straight reduction in petrol prices since August and fourth in diesel since October. In Delhi, petrol price has reduced to Rs 61.33 per litre, the lowest in 44 months and Diesel to Rs 50.51 per litre, the lowest since July 2013. After today's reduction, petrol price has been cut by Rs 12.27 per litre cumulatively since August and diesel prices have been cut by Rs 8.46 a litre in four reductions.
Owing to the oversupply in international markets, crude oil prices have been witnessing steady declining trend since June and hit a fresh five-year low of about $60 per barrel on December 15. State-run oil marketing companies stated that the price cut would have been sharper if rupee does not depreciate against the dollar in last few days.
Besides customers, the government has also benefited from falling oil prices. It raised excise duty on petrol and diesel twice to meet its fiscal deficit target of 4.1% of gross domestic product (GDP) in this financial year. These hikes are expected to generate additional revenue of about Rs 11,000 crore to the exchequer in the remainder of the financial year.
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