In a marginal relief to consumers, Indian Oil, the biggest oil marketing company, has cut petrol prices by Rs 0.56 per litre with effect from midnight today.
Other two companies-Bharat Petroleum and Hindustan Petroleum are expected to announce cuts shortly. In the capital, petrol will now cost around Rs 67.90 per litre.
"It has been decided to revise the petrol prices downward by Rs 0.56 per litre (excluding State levies in Delhi) with effect from October 9", said a statement from IndianOil. Companies are learnt to be making a margin of around Rs 1.60 for every litre of petrol prior to this cut.
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Presently, the Indian Rupee-US Dollar exchange rate is showing an appreciating trend. The international oil prices, however, continue to remain firm casting their shadow on petrol prices.
There has been significant volatility in international oil prices and the exchange rate. "The trends in the international oil market and exchange rate shall be closely monitored and the same shall be reflected in future price changes," it said.
The three oil marketing companies-IndianOil, Bharat Petroleum and Hindustan Petroleum-have incurred a loss of Rs 2,600 crore approximately on sale of petrol during April-September period due to inability to change retail selling prices to the desired extent in line with market conditions.
OMCs are also suffering under-recovery on sale of three sensitive petroleum products, namely diesel (Rs11.65/litre), kerosene (Rs 33.93/litre) and domestic LPG (Rs 468.50/cyl).
The projected under-recovery on these products is expected to cross Rs 160,000 crore for the current year against Rs 138,541 crore last fiscal.