For a second time in a week petrol and diesel prices have been slashed by oil marketing companies. After Tuesday’s rate revision, petrol prices were cut by 22 paise while diesel prices were reduced by 23 paise across the country.
Petrol price in New Delhi currently stands at Rs 90.56 per litre as against Rs 90.78 on Monday while diesel is available for Rs 80.87 a litre as compared with Rs 81.10 yesterday's price, state-run oil refiner Indian Oil Corporation's (IOL) website showed.
Petrol rates have also dropped in other major cities including Kolkata ( Rs 90.77), Mumbai ( Rs 96.98), Chennai ( Rs 92.58). Meanwhile, diesel price in Mumbai has now come down to Rs 87.96. It has also dropped in Chennai to Rs 85.88 and in Kolkata to 83.75.
As per the daily pricing mechanism, the fuel prices are dependent on the global crude prices and the rupee-US dollar exchange rate as India imports more than 80% of its crude requirements. In addition to it central and state taxes make up for over 61% of consumer petrol price while they constitute more than 56% of diesel rates.
On Tuesday, in the international oil market, Brent crude prices tumbled as traffic resumed on the Suez Canal after a colossal ship blocking the waterway was freed and the spotlight shifted to an OPEC+ meeting this week where the extension of supply restrictions likely to be discussed amid a surge in covid cases worldwide.
What is fuel decontrol?
Fuel price decontrol started in 2002 with the government freeing up prices of ATF in that year, petrol in the year 2010 and diesel in October 2014.
Earlier the Government used to intervene in fixing the price at which the fuel retailers used to sell diesel or petrol.
However, fuels such as domestic LPG and kerosene still are under price control.
For other fuels such as petrol, diesel or ATF, the price is supposed to be reflective of the price movements of the so-called Indian basket of crude oil.
