Petrol Prices to Go Down by Re 1 this Diwali

Petrol prices may fall down in the country before Diwali as crude prices has hit a new low in four years. Its is expected that state oil firms may cut the petrol price by about Re 1 per litre. As per the media reports afloat, the diesel prices are also expected to be reduced after the state assembly polls on October 15.

Since June, the Brent crude prices has dropped more than 20 per cent which favours the price cut. As per the industry sources, State-run Indian Oil Corporation (IOC), BPCL and HPCL are expected to hold a meeting this week to slash petrol prices but the final decision on cutting the diesel prices will be followed by the Cabinet approval. For the time being, the oil ministry is waiting the decision of higher authorities before taking the matter to cabinet.    

Last week on the slipping of crude prices International Monetary Fund (IMF) said, “Oil prices could move either way depending on geo-political developments. An immediate risk relates to disruptions to oil production owing to escalating geopolitical tensions, particularly in Iraq, Libya, and Yemen. Activity in these countries could contract in response to such disruptions, should they materialize. Such disruptions could also lead to higher oil prices and lower global growth.”

India's imports about a billion barrels a year, so if crude oil prices on average costs $106 per barrel in the last fiscal and if it falls to $100 per barrel, the country's import bill will fall by $10 billion (about Rs 61,000 crore).

Saudi Arabia was “quietly telling oil market participants” that it is comfortable with lower oil prices “for an extended period”, Reuters reported on Monday.