End to relentless petrol, diesel price rise brings no joy as cuts minuscule

The trend of minuscule reduction in petrol and diesel prices continued for the third consecutive day. File photo 
High fuel prices have burnt a hole in the common man's pockets. With mounting frustration, rates have been cut for the third consecutive day today. However, this is likely to be cold comfort for most given that the reduction in prices has been minuscule. Prices for petrol and diesel fell by 6 paise and 5 paise per litre, respectively, on Friday. After a one paisa cut in fuel prices, petrol prices across the four metros were cut on Thursday by seven paise a litre and diesel prices fell by five paise. 

Petrol now costs Rs 78.29 per litre in Delhi, while the price of diesel has been revised to Rs 69.20 a litre. The revised Petrol prices in other metro cities are -- Rs 80.92 in Kolkata, Rs 86.10 in Mumbai, and Rs 81.28 in Chennai. The revised diesel prices are Rs 71.75 in Kolkata, Rs 73.67 in Mumbai, and 73.06 in Chennai.

How does this measure up against the previous hike in petrol prices? These cuts contrast against the nearly Rs 4 per litre rise in prices during May 14-29, with the daily hike in prices varying around 15-30 paise a litre. Similarly, diesel prices in all the four metros also were at record levels during the period.    

A direct comparison of prices brings home the point. In the national capital on Thursday, petrol was sold at Rs 78.35 per litre, down from Rs 78.42 on Wednesday. Compared to Friday's prices, that is just a 13 paise difference in the favour of the consumer.   

On Thursday, in the other key cities of Kolkata, Mumbai, and Chennai, the fuel was priced at Rs 80.98, Rs 86.16, and Rs 81.35 a litre, respectively. All these prices were down by seven paise from Wednesday's levels.  

On Thursday, diesel prices in Delhi, Kolkata, Mumbai, and Chennai stood at Rs 69.25, Rs 71.80, Rs 73.73, and Rs 73.12 per litre, respectively.   

After 16 days of relentless price hikes that followed lifting of a nearly three-week hiatus on price revision just before Karnataka went to polls, petrol and diesel prices were cut for the first time on Wednesday. However, the quantum of reduction was just one paisa.    

Why the cuts after 16 days of hikes? 

The reductions follow softening of international oil rates and the rupee gaining against the US dollar.  

According to Reuters, crude oil futures lost more ground on Friday, with the US market set for a second week of decline on pressure from record US production and expectations of the Organization of the Petroleum Exporting Countries (OPEC) boosting output. Global benchmark Brent crude, which was little changed in the previous session, was down 9 cents, or 0.1 per cent, to $77.47 per barrel.   

On Thursday, Brent crude was priced around $77 per barrel.

The Finance Ministry has reportedly pinned its hopes on further reduction in global crude oil prices. Economic Affairs Secretary Subhash Chandra Garg on Thursday indicated that the retail prices of petrol and diesel could see a further decline. When asked about the mere 1 paise reduction in petrol prices announced by oil companies on Wednesday, Garg termed it "formula driven", but added that the trend for reduction had begun. 

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