Petrol price reduced by Rs 2 a litre

Amidst public clamour over the increase in petrol prices, oil companies today announced a reduction in price by about Rs 2 a litre.

The partial rollback, with effect from midnight Saturday, comes days after petrol prices were hiked by about Rs 7.50 a litre, the sharpest increase ever. On Thursday, Opposition parties had called a Bharat Bandh in protest.

The decision to cut the prices came after the latest fortnightly revision by oil companies which decided to pass on the benefit of the decline in international crude oil prices to consumers. Gasoline prices have fallen from USD 124.37 per barrel to USD 115.77 during this period.

After the reduction, petrol will cost Rs 71.16 a litre in Delhi, Rs 74.33 in Mumbai, Rs 75.40 in Chennai and Rs 75.81 in Kolkata.

"It has been decided to revise the petrol prices downward by Rs 2.02 per litre (including state levies in Delhi). The decrease in other states will vary, depending upon the rate of the state VAT/sales tax," Indian Oil Corp said in an announcement on behalf of oil companies.

A PTI report said Vayalar Ravi became the second Union Minister from the Congress after A K Antony to disapprove of the petrol price hike. In a letter to Petroleum Minister Jaipal Reddy, Ravi questioned the claims of oil companies that they were incurring huge losses and asked his cabinet colleague to scrutinise the issue in detail.

Defence Minister Antony had on Wednesday criticised the hike saying it was "not a correct step" and the oil companies should have shown some "propriety" before taking the decision.

Ravi wrote to Reddy: "Apparently, the claim made by oil companies that they are running at a loss seems to be untrue. As a matter of fact, the expenditure of oil companies, including salaries, is among the highest in India and there is a perception that funds are being wasted."

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