Indian consumers could get some respite from the high fuel prices by mid-November. The Government is considering revising the fuel prices this time dropping the price of petrol by Re.1 per litre. This move by the government will be welcomed by everyone but it does begs a question. Is the government cracking under pressure from the opposition after recent hike in prices which left even its own coalition up in arms. Could this be a move to made in haste or just a gimmick to keep the opposing parties on their leash?
Having said that, it is the Oil Marketing Companies (OMCs) who are likely to meet early next week to discuss the possible reduction in the price of petrol. The move by the OMCs to reduce the current petrol prices by at least 80 paise per litre can also be attributed to the drop in the global crude oil prices. They are expected to meet on November 14th after which an official statement could be released. If passed, this will be the first reduction in the prices of petrol since January 2009.
“Global oil prices fell sharply on Friday and if the rates sustain and the rupee does not depreciate any further, a reduction of Rs. 0.80 a litre in petrol prices is possible,” a senior Indian Oil Corporation official toldThe Hindu.“If the rupee continues at current levels and if Singapore FOB (free on board) gasoline spot prices continue to average $115.80 a barrel, oil companies may reduce basic prices by at least 60 paise a litre,” a source told Reuters on the condition of anonymity.
The weakening Indian Rupee against the US Dollar has also been the cause of concern for the oil companies. International rates of petrol have come down to about $115 per barrel. Last month the price stood at $123 per barrel. Last week the oil companies hiked the price of petrol by Rs 1.80 per litre. Since last year petrol prices have gone up by Rs 20 per litre.
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