New Delhi: A Rs 2.50 per litre cut in diesel prices, the first in over four years, is likely after results of assembly polls in Maharashtra and Haryana are announced on Sunday. Petrol price, which unlike diesel is a deregulated commodity, is likely to see a price reduction of about Re one a litre at the next scheduled revision due tomorrow.
"The government will take the right decision at the right time," Oil Minister Dharmendra Pradhan said when asked about the impending diesel price cut. Diesel, the nation's most consumed fuel that has a direct bearing on prices of essential commodities as it is the preferred fuel for the transport sector, is regulated or controlled by the government.
The fall in international oil rates last month led to situation where state-owned oil firms started making profit on diesel sales, the first time in history. However, the benefit could not be passed on to consumers as the model code of conduct had come into place with the announcement of elections to Maharashtra and Haryana assemblies.
Since reduction in rates would have been a new policy, are vision was deferred.
"As you are aware, election code of conduct is in place so will decide on the issue at the right time," Pradhan said without elaborating.
Asked if rates will be cut, he retorted, "Wait for the decision which we will take at the right time."
Benchmark Brent crude today fell to the lowest level in almost four years after the International Energy Agency said oil demand will expand this year at the slowest pace since2009. Brent crude price declined USD 1.36, or 1.5 per cent, to USD 87.53 a barrel in London trading. The drop in rates will result in the profit on sale of diesel expanding from Rs 1.90 a litre calculated based on the average rate prevailing in the second half of September.
Oil industry wants diesel rates to be reduced to protect their market share which they otherwise would lose to private retailers, who price the fuel in tandem with international prices.