Day before stimulus, petrol cut Rs 5, diesel Rs 2, LPG unchanged

Amitav Ranjan Tags : fuel prices, india, petrol, diesel, crude oil Posted: Friday , Dec 05, 2008 at 0310 hrs New Delhi:

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Frittering away an opportunity to remove pricing of auto fuels from its controls, the UPA government today opted for a cut of Rs 5 per litre in petrol price and Rs 2 per litre in diesel, effective from midnight tonight. The price of LPG cooking gas was left unchanged.

The first option before the Cabinet Committee on Political Affairs was that petrol and diesel pricing “may be freed that is, removed from government control with immediate effect” while retaining government hold on fixing kerosene and cooking gas LPG prices.

While giving the power to state-run oil marketing companies to fix prices, this option would have meant a cut of Rs 14.89 a litre on petrol and Rs 3.03 per litre on diesel.

The CCPA today chose the second option: A reduction of Rs 5 per litre on petrol and Rs 2 per litre on petrol with no change in retail prices of kerosene or LPG where OMCs continue to lose Rs 17.26 per litre and Rs 148.32 per cylinder respectively.

“This was chosen as it garners profit for the OMCs in the last five months of the fiscal year and pares the burden on the government which has to meet part of the under-recoveries by issuing bonds,” sources said.

It also gives the Centre the option to re-calibrate prices depending on how global price of crude oil behaves in future, they said. This was also indicated by Petroleum Minister Murli Deora who said that today’s reduction was an “interim measure”.

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thanksBy: naveen patnaik | 06-Dec-2008 Reply | Forward thanks for the government bcs it's a great news especially 4 d youth so,i can rome with my girlfriends on my bike with low cost and more profit,till yet i had to think abt d petrol prices thanks india,lage raho india bhai.

Let it be automaticBy: KSC Nair | 06-Dec-2008 Reply | Forward As of today, crude offers are at40.81, January delivery. Proportionately, India's basket could be at $38. US recession has dipped Gasolene quotations by 40 pct., and forecasters see possiblity of recession driven prices at $25 p. bl. in 2009. Government should utilise these environs to arrive at a system for self-market derivedd oil pricing ., so that consumers can also get the benefit of genuine competition, as this will bring in the private refiners also. And ,Subsidies must go through government account, not oil co's, for which a separate pool could be created. Hiding behind Oil Bonds, cross subsidies and out of budget debits should be taboo.

Oil pricingBy: Parag | 06-Dec-2008 Reply | Forward Another bad alternative , choosen by the goverment of 60's mindset!!!

Petropl priceBy: Subrata Mondal | 06-Dec-2008 Reply | Forward Petrol price has been reduced by Rs.5 and Diesel by Rs.2. Will the price of the so called essential commodities will be reduced by themanufacturer/distributors/whole seller/retailer. The printed MRP never gets changed downward. It get changed to upward direction only. ST bus fare was increased after the diesel price hike. Are they going to reduce the fare. Where will the effect of change come ? It will definitely will come to the common man.

Good govt decisionBy: Sandeep | 05-Dec-2008 Reply | Forward Great move by govt. Even though oil companies have huge oil losses and ideally govt could have waited a little longer but this ensures some relief to common man. Also, in India due to reasonable/unreasonable political pressures, this had to be done..LPG and Kerosene still have huge subsidies so that has to be balanced out by govt. Asking for LPG price reduction makes no sense due to subsidies already in place.