November 15th, 2011
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Oil price to reduce by Rs 2 in 2 days

petrol price New Delhi: State-run fuel retailers are set to reduce petrol price by Rs 2 a litre in 2 days. This decision comes after the government suggested a reduction in the prices. This cut down however, cannot be termed as a rollback. Sources from the Oil Ministry, said the slashing of prices would be a political decision. The government has decided to pass on the benefit of recent softening in the fuel’s price in bulk markets and a comparatively lower average rate for crude through the better part of the fortnight.

The petrol prices have been hiked five times since December 2010. If the prices are brought down, it will be the first reduction in the fuel prices since June 2010 when it was unshackled from the control of the government. The move is also expected to douse popular and political anger ahead of the winter session of Parliament, scheduled to begin from November 22.

Hopes of a reduction had brightened on Friday when Brent North Sea crude for December delivery shed 61 cents to a tad over $113 a barrel and New York’s main contract, light sweet crude for the same delivery period, retreated 23 cents to $97.55. Simultaneously, the price of petrol in Singapore bulk market too dropped to $115 a barrel from an average of $125 last month.

Petrol price in India is benchmarked to a combination of Brent and Dubai crude and petrol’s rates in the Singapore bulk market. The oil marketers follow a fortnightly pricing cycle and the fall in crude and product prices have brought down the average for the fortnight and also offset the impact of the rupee’s fall from 46 to about 49 to a dollar.
Malayalam News


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