Diesel Prices Likely To Be Cut By Re.1 Per Litre, Petrol By Rs1.75

Tuesday, 30 September 2014, 11:37 Hrs
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NEW DELHI: Diesel prices are likely to be cut by about 1 per litre, the first reduction in rates in over five years, while petrol price may be slashed by 1.75.

State-owned oil companies are likely to announce reduction in rates this evening, made possible because of softening in international crude oil prices, government and industry sources said.

Under-recovery or the difference between retail price and the imported cost was wiped out for diesel and there was an over-recovery of 35 paise per litre from 16 September.

This over-recovery is now about 1 per litre. While the government had resisted the temptation to cut rates then, prices are likely to be reduced at the fortnightly review due.

 Sources said oil ministry is of the view that while the cabinet committee on political affairs (CCPA) had on 17 January 2013 allowed a monthly increase in diesel price of 40-50 paise per month to wipe out the under-recovery, it wasn’t envisaged that there would be an over-recovery. It wants to reduce diesel prices to protect state-owned oil companies’ market share, which may be lost to private retailers who would be selling diesel in tandem with international prices.

 Oil minister Dharmendra Pradhan is believed to have already written to Prime Minister Narendra Modi on the emerging scenario. Also, it has written to the Election Commission seeking their concurrence for the price decrease in view of state assembly elections in Maharashtra and Haryana.
Source: PTI

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