Petrol Price Dips Below Rs. 74 Per Litre While Diesel Price Wipes Off All Hikes

After clocking a massive hike in last six-weeks, petrol price on Wednesday fell below Rs. 74 per litre mark for the first time since April. Petrol price in Delhi was cut by 83 paisa to Rs. 73.24 per litre, according to a price notification issued by state-owned fuel retailers. Diesel rates were cut by 40 paisa to Rs. 68.89 per litre. With this, the reduction in rates in last six weeks total to Rs. 9.26 per litre on petrol and Rs. 7.2 per litre on diesel. Rates have been on the decline since October 18. This has wiped off the entire price hike on petrol and diesel in two months beginning August 16.

Petrol price had touched a record high of Rs. 84.00 per litre in Delhi and Rs. 91.34 in Mumbai on October 4. Diesel on that day had peaked to an all-time high of Rs. 75.45 a litre in Delhi and Rs. 80.10 in Mumbai. The increase in the fuel prices have had an adverse impact during this festive season. According to the data published by the Federation Of Automobile Dealers Association (FADA), retail sales of passenger vehicles posted a de-growth of 14 per cent selling 287,717 units in the festive period 2018 compared to 333,456 units which were sold in the festive period last year. The sales to two-wheelers too witnessed a slump of 13 per cent at 15,83,276 units sold during the festive season compared to 18,11,703 units which were sold in last year.

Also Read: Festive Season 2018: Auto Industry Records Sluggish Sales

However, the reduction in fuel prices has helped the automakers to maintain a positive sentiment and they are hoping to meet their sales targets for the financial year 2018-19. On October 4, the government decided to cut excise duty on petrol and diesel by Rs. 1.50 per litre each and asked state-owned fuel retailers to subsidise prices by another Rs. 1 per litre by reducing their margins. Many states including Maharashtra matched that with a reduction in local sales tax or VAT. Subsequent to this, the petrol price came down to Rs. 81.50 per litre in Delhi and diesel to Rs 72.95 a litre on October 5. In Mumbai rates fell to Rs. 86.97 per litre for petrol and Rs. 77.45 for diesel.

Also Read: Passenger Vehicle Segment Records 1.55 Per Cent Growth In October

As the international oil prices continued to rise, price of petrol and diesel in Delhi increased to Rs. 82.83 and Rs. 75.69 on October 17. In Mumbai, rates touched Rs. 88.29 per litre for petrol and Rs. 79.35 per litre for diesel. But since then, international oil prices have been falling and rupee has also appreciated, resulting in decline in retail rates. With international oil prices declining to USD 60 per barrel, retail prices of petrol and diesel may reign easy in the next few days.

The retail selling price of petrol and diesel is dependent on the international prices of crude oil and the rupee-US dollar exchange rate.