The petrol, and diesel prices are likely to be slashed amid cheaper crude prices as the international oil prices continue to be extremely volatile. However, a top oil ministry official said he can't predict anything now about whether the rates will be cut before the Maharashtra elections. It should be noted that the global oil benchmark Brent crude futures fell below USD 70 per barrel last week -- the first time since December 2021 -- but gained thereafter. Brent was trading at USD 74.58 per barrel on Thursday while West Texas Intermediate advanced to trade at USD 71.71.
Why fuel prices will be slashed?
A decline in price of crude oil -- which is converted into fuels like petrol and diesel at refineries -- had rekindled hopes for a reduction in petrol and diesel rates that have been on a freeze for over two years now barring a pre-election reduction earlier this year.
"Oil prices continue to be volatile. They fell one day last week to below USD 70 but rose the day after," the official told PTI.
He added that until such time that the oil prices stay volatile, the state-owned fuel retailers are unlikely to revert to daily revising rates in line with cost.
While petrol and diesel pricing is deregulated (meaning oil companies have freedom to fix retail rates), the state-owned fuel retailers, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), have since late 2021 not revised prices in line with cost.
They froze rates in April 2022 only to cut prices by Rs 2 per litre each just before general elections this year before again freezing the rates. Petrol costs Rs 94.72 per litre in the national capital and diesel comes for Rs 87.62 a litre.
Will fuel prices be slashed ahead of Maharashtra polls?
Replying to a question on if the oil companies will cut fuel prices ahead of the crucial assembly elections in Maharashtra, the ministry official said, "it is a good question but I can't say (either ways)."
Last week, Oil Secretary Pankaj Jain had stated that the oil companies will be taking appropriate decisions on reducing fuel prices if international oil prices were to settle lower on a sustained basis.
(With inputs from PTI)
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