Mixed response against fuel price cut

Varied response coming in across the country after the government slashed fuel prices— petrol by Rs.5 and diesel by Rs.3 — for the first time in two years. While some state governments have welcomed the price cut, others are complaining demanding more reduction in the wake of slumping crude price in the international market.

The CPI-led West Bengal government has dubbed the reduction in fuel prices as meagre and inadequate when the petroleum prices are continuously rolling down in the international market.

While welcoming the price cut, Tamil Nadu Chief Minister M Karunanidhi has asked the government to reduce the prices of LPG as well to bring it to the earlier level.

The price cut has come into effect from Friday midnight.

Announcing the decision after the end of a meeting chaired by Prime Minister Manmohan Singh on Friday, Petroleum Minister Murli Deora told reporters that the reduction was made as an “interim measure” in view of the current instability in the global crude oil markets, and more cuts could be possible as the government was keeping an eye on the international markets.

However, against the public expectations, the prices of cooking gas distributed to households under a subsidised system were kept unchanged.

Deora said it was done so as state-run oil marketing companies were still making losses on their sale.

The reduction would lead to a revenue loss of Rs.6,000 crore to the Oil Marketing Companies in the current fiscal.

The international crude oil price fell over $ 100 a barrel from its mid-July peak of $ 147 in recent times. Currently, it is sailing in the international market at $ 43.5 a barrel and the Indian basket has fallen to almost $41.53 a barrel.

With the latest long waiting cut, the price of petrol in Delhi has come down to Rs. 45.62 (50.62) a litre and diesel Rs. 32.86 (34.86). In Kolkata petrol costs Rs. 47.52 (52.20) and diesel Rs. 33.81 (35.81); in Chennai, petrol will cost Rs. 50.07 (55.07) and diesel Rs. 35.13 (37.13), and in Mumbai petrol cost has reduced to Rs. 50.04 (55.04) and diesel Rs 36.93 (38.93).