New Delhi: In this summer of discontent, it's a partial relief for the aam aadmi. After the steepest hike of Rs. 7.54 a litre in the petrol prices last month, state-owned oil companies on Saturday announced a reduction of Rs. 1.68 per litre in petrol prices, excluding taxes. In Delhi, after including 20 per cent VAT, the reduction will be Rs. 2 a litre.
The reduction, a result of fall in international oil prices, will mean that petrol in Delhi will cost Rs. 71.18 per litre, as against Rs. 73.18 at present. Petrol price in Mumbai has been cut by Rs. 2.12 to Rs. 76.45 per litre while in Kolkata it has been reduced from Rs. 77.88 to Rs. 75.81. In Chennai, the price has been cut by Rs. 2.13 to Rs. 75.40 a litre.
The decision, flowing out of the fortnightly review by oil marketing companies, came as some relief for consumers battered by double-digit inflation.
The decision was expected on May 31 but was then delayed by two days due to the Bharat bandh called by the Opposition. Interestingly, the price of aviation turbine fuel was cut but not petrol.
The May 24 hike had come under sharp attack from all political parties including allies like the Trinamool Congress and the DMK and there was all-round demand for a rollback. Even Congress leaders had said they did not know about the petrol hike and have joined the chorus that the hike be withdrawn.
After the steepest hike in petrol prices last month, a few state governments had announced cut in taxes to ease burden on people. Kerala and Uttarakhand, both Congress-ruled, had announced an immediate cut in VAT on petrol.
India deregulated petrol prices in June 2010 but continues to subsidise kerosene, diesel and cooking gas to protect the poor from the impact of any inflation pressures. In the second half of 2011, oil companies began reflecting market realities more closely and began revising petrol prices.