Hyderabad, New Delhi: Days ahead of the announcement of the Lok Sabha polls, Union petroleum minister Hardeep Singh Puri on Thursday announced a cut of Rs 2 per litre in the prices of petrol and diesel, effective from 6 am on Friday.
In Hyderabad the cost of petrol stood at Rs 106. 66 on Thursday and diesel Rs 97.8 per litre on Thursday. Oil marketing companies were working out the enw cost of the fuel.
Reduction in petrol and diesel prices is expected to boost consumer spending and reduce operating costs for over 58 lakh heavy goods vehicles running on diesel, six crore cars and 27 crore two-wheelers.
The government had nearly a decade back freed petrol and diesel prices from its control and the rates till now were fixed and announced by oil companies.
But on Thursday, the minster Singh took to X to announce the rate revision. It came a week after a Rs 100 per cylinder reduction in cooking gas LPG price was announced.
International oil prices have been turbulent in the last couple of years. It dipped into the negative zone at the start of the pandemic in 2020 and swung wildly in 2022 - climbing to a 14-year high of nearly USD 140 per barrel in March 2022 after Russia invaded Ukraine, before sliding on weaker demand from top importer China and worries of an economic contraction.
But for a nation that is 85 per cent dependent on imports, the spike meant adding to already elevated levels of inflation and derailing the economic recovery from the pandemic.
So, the three state-owned fuel retailers - Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) froze petrol and diesel prices for the longest duration in the last two decades.
They stopped daily price revision in early November 2021 when rates across the country hit an all-time high, prompting the government to roll back a part of the excise duty hike it had effected during the pandemic to take advantage of low oil prices.
The freeze continued into 2022 but the Russia-Ukraine war-led spike in international oil prices prompted a Rs 10 a litre hike in petrol and diesel prices from mid-March 2022 before another round of excise duty cut rolled back all of the Rs 13 a litre and Rs 16 a litre increase in taxes on petrol and diesel done during the pandemic.
That followed the current price freeze, which began on April 6, 2022, and will end with a revision in rates effective Friday.
The three firms had till now resisted calls to revert to daily price revision and pass on softening in rates to consumers on grounds that prices continue to be extremely volatile - rising on one day and falling on the other - and that their past losses have not been fully recouped.
