The fuel prices have dropped several times this year owing to the global decline in fuel prices. It has played into the hands of the newly elected government in India. Many people believe it is the new government and officials that have enabled this change.
The petrol and diesel prices have once again fallen sometime ago, however, Oil companies decided not to pass this benefit as they expected the price to go up. Since that it has not happened the government is stepping up and has companies to pass the benefit as part of new year celebration.
The fuel price slash would not be as steep as it has been on several occasions. Several oil companies have reported though the price has fallen the value of Rupee has also taken a hit and affected the profits. The global price of crude oil has fallen significantly to almost nine to ten U.S. Dollars.
The prices of both petrol and diesel has been deregulated and are in sync with international rates. During this period Indian Rupee has gone from 61 to 63.26 as of today. India imports its crude oil and we end up paying in Dollars, thus the fluctuation causes the rise or fall in end cost.
The new year benefit will be passed onto LPG users as well. It is, however, unclear by how much the prices will be reduced in the following year. This time the government has requested all oil companies to pass benefits on 1st of January, 2015 as part of the celebration.