With effect from Sunday, retail petrol prices will be cut by Rs 2 a litre, the source said. Oil firms will reduce petrol price by Rs 1.68 per litre, excluding taxes. After including 20 per cent VAT, the cut in Delhi comes to Rs 2 per litre, sources said.
RPN Singh, MOS, Petroleum told NDTV that this is not a roll back. “Petrol prices are deregulated. When the oil companies were facing losses, they raise the prices and when the prices go down, they pass on profits to the consumers,” he said.
Indian Oil chairman and managing director RS Butola had said last week that the company will review prices on on June 1, 2012.
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Last month, state oil retailers - Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp - raised petrol prices by Rs 6.28 a litre, excluding taxes. The move came under intense criticism from masses and political parties alike. The opposition led by NDA had also announced a country-wid bandh on Thursday in retaliation.
PM's economic advisor Dr C Rangarjan too said that the price should have been hiked in small steps. According to the chief advisor, the price hike was necessary to maintain fiscal prudence. He further advocated a rise in diesel and LPG prices.
India's fiscal deficit during the 2011-12 fiscal year that ended in March was Rs 5.2 trillion, or equivalent to 5.9 per cent of India's gross domestic product. Meanwhile, India's growth slowed in the January-March quarter to 5.3 per cent, much below the expectated rate of 6.1 per cent.
Meanwhile, Oil minister S Jaipal Reddy on Monday ruled out any price hike in diesel, kerosene and LPG for now. He added that no date has been fixed for a meeting of the Empowered Group of Ministers (EGoM), whose consent is required for any increase in the price of these three regulated commodities. Finance Ministry sources, however, told NDTV Profit that an EGoM meeting is likely on June 1.
With inputs from PTI, Thomson Reuters