Petrol prices may be cut by Rs. 3 this week

Petrol prices may drop by Rs. 3 per litre as crude oil prices slipped below $96 per barrel, the lowest in the last one year. This cut may take place on June 16.

Petrol prices may be reduced on June 16, 2012, according to an official who was quoted in the Economic Times. If this happens the price of petrol will come down to Rs. 68.61 per litre from the current Rs. 71.16 per litre in New Delhi. Couple of weeks ago, oil companies had cut the price of petrol by Rs. 2 per litre. Also read: Petrol prices cut by Rs.2  

However, while the petrol price cut is imminent, government is considering hiking diesel price by up to Rs. 3 per litre. But for price hikes, the Empowered Group of Ministers that can raise diesel prices has to meet and this has not happened so far. Assuming the government hikes diesel prices, it may put a cap on the possibilities of hiking excise duty for diesel cars as proposed by Oil Minister Jaipal Reddy. Also read: Oil minster proposes Rs. 2.55 lakh price hike on diesel cars

On the other hand, hiking diesel prices will definitely feed the already high inflation the country faces today. Diesel price hike will not only increase the running cost for diesel commuters but will also pressurize public transport authorities, fleet operators and truck operators to hike their tariffs. The falling crude oil prices, however, could help in averting a diesel price hike. The crude oil price dip has reduced the revenue losses on diesel down to Rs. 10 per litre today from the earlier Rs.12.53 per litre during the second half of May.