Petrol price likely to be cut on Independence Day

New Delhi: Petrol prices are likely to be cut on Friday on the back of softening in international rates, Indian Oil Corp, the nation's largest fuel retailer. "Petrol is a decontrolled product and prices increase or decrease depending on input cost every fortnight. We had cut rates on August 1 and will be reviewing prices on August 15," IOC Chairman B Ashok told reporters here.            

State retailers revise petrol price on 1st and 16th of every month based on average international oil price and rupee-dollar exchange rate in the previous fortnight. "There are some positive indications," he said when asked if there is likelihood of a price cut going by the average of oil price and exchange rate so far.            

"How much the price can be reduced etc is to be worked out which we will do on the 15th," he said. Oil firms had last cut rates on August 1 by Rs 1.09 per litre, the first reduction in price since mid-April. Petrol currently costs Rs 72.51 per litre in Delhi.            

There are indications that the rates may be cut by a similar amount on August 15 though Ashok refused to speculaton the quantum. "I really can't say how much prices will be reduced. As I said there are positive indications (from falling international rates and forex rates) and we will get to know of the possible revision only at the end of the fortnight on August 15," he said.            

This will be the second reduction in rates this month. The government had in June 2010 freed petrol prices and since then rates have moved in tandem with the cost on most occasions. For diesel, the government had in January 2013 decided to eliminate the subsidy in stages through monthly increases in prices by up to 50 paise per litre.  With monthly increases continuing, subsidy or losses on diesel have been trimmed to Rs 1.33 per litre but this will go up as there is a marginal increase in international gasoil (diesel) prices.            

Diesel price revision is due only on September 1 as per the policy of raising rates every month.