Fluctuating crude prices and rising rupee may lead to even cheaper petrol in coming days
Petrol prices may fall further in the coming days because of fluctuations in international crude oil prices and an appreciating rupee. While petrol became cheaper by almost Rs 2 yesterday, oil marketing companies and sources said the appreciating rupee would be a major factor when determining petrol prices in the future. They said if the rupee kept appreciating it would lead to a further fall in petrol prices.
The current international crude oil price is $111 per barrel and experts say it might fall to $100, which will lead to a Rs 5 per litre fall in the price of petrol. Crude oil prices fell from $125 to $111 last week, and market watchers feel this drastic change is a sign of a further fall being in the offing. R S Butola, chairman of the Indian Oil Corporation (IOC), also made a statement last week saying the price will be cut if the rupee stabilisation coincides with the fall in international prices.
An IOC official, who requested anonymity, said that oil marketing companies were seeing serious losses because of which prices cannot be reduced right away. "There is also speculation in oil prices, which adds to the volatility in crude oil prices," he said. Ali Daruwala, spokesperson for the Pune Petrol Dealers Association, said that they had submitted a proposal to the Pune Municipal Corporation (PMC) and the Pimpri-Chinchwad Municipal Corporation (PCMC) for reduction of the octroi charges by 2 per cent. "Even if the octroi is reduced by 1 per cent, the price will come down by 72 paise. A full 2 per cent reduction will reduce prices by Rs 1.44," Daruwala said.
Although both civic bodies are yet to taken a final decision on reduction of octroi, the proposal has been passed in the meetings of their respective general bodies in July. As octroi is a major revenue source for the civic bodies, they are cautious when it comes to reducing it. The fall of Rs 1.85 per litre was the first reduction in petrol prices in 33 months. Petrol in the city now costs Rs 72.23 per litre.