New Delhi, March 15 : On Friday, petrol and diesel prices were reduced by Rs 2 per litre each, marking the first adjustment in rates in nearly two years. This reduction comes just a day before the commencement of the model code of conduct for the upcoming general elections.
According to a price notification issued by state-owned fuel retailers, petrol in the national capital will now be priced at Rs 94.72 per litre, down from the previous Rs 96.72 per litre. Similarly, the price of diesel will now be Rs 87.62 per litre, as opposed to the earlier Rs 89.62.
This price cut follows last week’s announcement of a Rs 100 per cylinder reduction in cooking gas (LPG) prices and a Rs 2.50 per kg reduction in CNG rates.
In Mumbai, petrol now costs Rs 104.21 per litre, Rs 103.94 in Kolkata, and Rs 100.75 in Chennai. Diesel is priced at Rs 92.15 in Mumbai, Rs 90.76 in Kolkata, and Rs 92.34 in Chennai. These rates vary across states due to differences in local taxes, with the highest local sales tax or VAT seen in BJP-ruled Maharashtra and the lowest in Delhi.
Emkay Global Financial Services commented on the price reduction, noting that while the Ministry of Petroleum and Natural Gas initially reported oil companies taking the decision themselves, the government’s influence can be felt, especially given the timing just before the announcement of election dates and the model code of conduct.
The firm expects this price cut to remain effective for the next 2-2.5 months, with a return to a normalized margin scenario after the national elections. They anticipate that higher operating expenditure over the years will likely set margins higher than Rs 3-4 per litre, and that deepening deregulation with the resumption of daily pricing should be able to absorb any movements in oil prices ranging from USD 5-10 per barrel.
