With a drop in global crude prices due to higher output from the US and uncertain demand from China, it was natural for Indians to expect petrol and diesel to get cheaper. But after reports of a possible 40 paise reduction in fuel prices on Tuesday, the country woke up to disappointment as Indian oil firms changed their mind. Instead only the prices of 19 kg commercial LPG cylinders have been slashed bt Rs 115, while gas remains costly for households.
First change in prices after May
Indians haven’t seen any change in fuel prices since May, when excise duty was cut on petrol and diesel, while a subsidy was applied on LPG cylinders. Now 19 kg LPG cylinders for restaurants and food stalls are priced at Rs 1,744 as opposed to Rs 1,885 earlier, but households still need to shell out Rs 1,053 for 14.2 kg cylinders. The changes in rates will mean that commercial cylinders will now be worth Rs 1,696 in Mumbai, and in Kolkata and Chennai they’ll be priced at Rs 1,846 and Rs 1,893 respectively.
Still no respite for motorists
On the other hand, the Indian Oil Corporation rolled back its plans to reduce petrol and diesel rates, days after posting a net loss of more than Rs 272 crore. Reports had suggested that prices would be slashed by 40 paise every day for five days, to bring a total reduction of Rs 2 on petrol and diesel. But it seems Indians will have to wait longer for cheaper fuel, since state-owned oil firms are still recovering from record losses earlier this year, despite compensation from the government.
Although the three main oil firms in India, Indian Oil, BPCL and Hindustan Petroleum are supposed to revise prices daily based on crude rates, but have frozen them for six months, since pricing is deregulated now.