29 January,2009 10:29 AM IST | | Agencies
The Government slashed petrol prices by Rs 5 a litre and diesel by Rs 2 per litre, in the second round of cuts in as many months, while the domestic LPG rate was brought down by as much as Rs 25 per cylinder.
The reduction, which will be effective from Wednesday midnight, will help further ease inflationary pressures and benefit common man.
Petrol in Delhi will cost Rs 40.62 a litre instead of the present Rs 45.62 per litre, while diesel will be sold at Rs 30.86 per litre as against current Rs 32.86 a litre. Similarly, a 14.2-kg domestic LPG cylinder will now cost Rs 279.70 in place of Rs 304.70.
"The Cabinet Committee on Political Affairs headed by External Affairs Minister Pranab Mukherjee has decided to reduce petrol, diesel and LPG prices to pass on the benefit of softening international oil prices to consumers," Petroleum Minister Murli Deora said.
While state-run oil firms were making a neat Rs 9.86 a litre profit on petrol before this price reduction and Rs 3.48 on every litre of diesel, they were still losing Rs 32.97 per LPG cylinder and Rs 12.16 per litre of kerosene. The reduction could have been sharper but for the losses on LPG and kerosene.
Petroleum Secretary R S Pandey said no decision on raising excise and customs duty to mop up any extra revenue has been taken. Also, the parallel proposal of freeing petrol and diesel prices from administrative control has not been acted upon.
"The Government will made good all of the losses of state-run retailers after accounting for Rs 32,000 crore contribution from upstream firms, through issue of oil bonds," he said.
State-run oil firms are expected to log Rs 1,01,445 crore revenue loss on sales of petrol, diesel, kerosene and domestic LPG this fiscal.
