New Delhi, November 15
Oil companies today cut petrol prices by Rs 2.22 per litre, thus neutralising the hike effected last fortnight that had caused huge public uproar. This is the first time after deregulation of petrol prices that these have been revised downwards.

Though oil companies said this was the outcome of their fortnightly review, a political nudge cannot be ruled out given the huge protests that followed last time both from the opposition parties as well as UPA allies like the Trinamool Congress. This will also give a breather to the government before the Parliament session that begins on November 22.

At that time, there was a demand for a rollback but the government had refused. Now, with the cut in prices, the government has protected the principle of deregulation in which oil companies have the freedom to decide prices while at the same time providing relief to the outraged public which is upset at these frequent price hikes.

IndianOil said in a statement that the prices have been cut following a fall in international crude oil prices and improvement in the exchange rate. The company reviews petrol prices on fortnightly basis. The latest review revealed that at the current prices, there will be an over-recovery of Rs 1.85 per litre. The company has, therefore, decided to revise the petrol prices downward by Rs 1.85 (excluding state taxes and levies) from November 16. The retail impact of the cut will be Rs 2.22 in Delhi.

The reduction has been possible as a result of favourable impact of slide down both in the international prices of petrol and in the rupee/dollar parity. The currency exchange rate, which had moved high in the second fortnight of October, came down marginally and remained more or less stable around Rs 49.30 per dollar.

The statement warned that given the rupee weakness, there could be a hike again next fortnight. It said the rupee suffered significant depreciation yesterday and today. If the rupee/dollar parity remained at this level or moved further away, its impact would get reflected in the next pricing cycle. The relevant pricing cycle applicable for the fortnight beginning November 16 has, therefore, remained free from any major disturbance in the rupee/dollar parity.

With this cut, there will be no under or over-recovery on petrol prices. On diesel, the under-recovery has increased from Rs 8.58 to Rs 10.17 per litre. In respect of kerosene and cooking gas, the under-recovery remains at Rs 25.66 per litre and Rs 260.50 per LPG cylinder.

In the current year, as a result of rising international prices, IndianOil has revised prices upward by Rs 4.17 per litre in May, Rs 2.62 per litre in September and Rs 1.50 per litre on November 4.