We had yesterday reported that oil companies would be slashing the price of both petrol and diesel. They have now confirmed that both petrol and diesel prices will be reduced with immediate effect.
The oil companies were permitted to slash petrol prices by Rupees 2.42, while diesel prices were reduced by Rupees 2.25 per litre. These will not be the complete reduction as Government of India had raised the excise duty further by two rupees for both petrol and diesel.
The hike in excise duty is being justified as it would be used for infrastructure projects. Finance Ministry of India plans to gain additional revenue of 20,000 crore for the current as well as next financial year.
This is the ninth time in a row fuel prices have been slashed in India. The reduction in fuel prices is due to decline of international crude oil prices. Fuel prices have been at an all time low over the last six years.
Benefit passed on to consumers is not as great as the price decline. Our Government has raised the excise duty thus not allowing the end consumer to experience the complete benefit. The price cut, however, is controlled by oil companies as the government has deregularised both petrol and diesel.
Petrol prices in Delhi currently stands at Rupees 58.91, previously it was Rupees 61.33 per litre. Diesel on the other hand will also be cheaper and costs Rupees 48.26, while earlier the price for a litre was Rupees 50.51. Global fuel analysts believe fuel prices could fall further in the coming days.