New Delhi, Dec 16: State-owned oil companies today decided not to change petrol prices this fortnight in view of correction in rupee-dollar value.
“RBI action has led to rupee correcting by Re 1 per dollar and we feel we should wait for some time before making any changes in retail prices of petrol,” an official of Indian Oil Corporation said.
“The fall in depreciation of rupee will be good for oil marketing companies,” Oil Minister S Jaipal Reddy told reporters when asked about the impact of rupee movement on the oil marketing companies.
Oil companies were to review petrol prices yesterday but had postponed the decision till today as they were waiting for a clear political clearance for raising petrol by Rs 0.60 to 0.70 per litre.
Reddy met Finance Minister Pranab Mukherjee this evening and soon after the meeting oil companies announced that they will wait little longer to see the impact of RBI intervention on Rupee-Dollar movement.
Reddy, however, declined to comment on petrol prices after meeting Mukherjee.
Yesterday, rupee had tumbled to a record low of Rs 54.30 per dollar. However, the rupee gained 94 paise today to settle at Rs 52.70 per US dollar.
“In view of RBI's steps and strengthening of the rupee, the IOC management is reviewing the situation and will decide on petrol price revision at the appropriate time,” an Indian Oil spokesperson said.
Concerned over economic slowdown, the Reserve Bank today kept interest rates unchanged and indicated that it could cut key policy rates from now onwards to arrest falling growth while keeping a close vigil on inflation.
While a fall in the rupee against US dollar has resulted in an increase in the cost of oil imports, international rates of gasoline—against which domestic petrol prices are benchmarked—had also increased, necessitating a price hike. State-owned oil firms have cut petrol prices on two occasions in the past one month after international oil rates eased.
The companies reduced petrol prices by Rs 2.22 per litre, or 3.2 per cent, from November 16 and followed this with a Rs 0.78 per litre cut from December 1.
Public sector oil firms, which revise petrol prices on the 1st and 16th of every month based on the average international rates of the previous fortnight, informally consult the parent Petroleum Ministry before taking a decision.
Parliament is in session and an increase in petrol prices may lead to protests by Opposition parties.
The price of gasoline has averaged about USD 111.11 per barrel in Singapore this month, up from USD 108.25 a barrel in the previous fortnight.