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With the prices of petrol and diesel in the international market falling over last fortnight, indications are that domestic public sector oil marketing companies may reduce rates for the two transport fuels on Monday.
However, the weakening of the rupee as compared to the US dollar may result in the price cut being minimal or even a status quo being maintained.
According to data gathered by BusinessLine, the weighted average price of petrol and diesel in the international markets fell by around $ 0.01 each between August 1 to August 8.
But in the same period the Indian Rupee weakened to 66.90 to the US Dollar as compared to 66.71 to the US Dollar on August 1.
Despite the weakening of the rupee, petrol and diesel were still cheaper towards the end of the current fortnight in rupee terms. For example, the weighted average price of a litre of petrol would cost around ₹ 63.37 a litre on August 1 but it would have come down to ₹ 62.86 a litre on August 8. Similarly, diesel would have cost Rs 55.36 a litre on August 1 but by August 8 it would have come down to ₹54.85 a litre.
Typically, public sector oil marketing companies change the rates of petrol and diesel every fortnight. According to Indian Oil Corporation’s statements in the past, the two primary factors determining the price change is the international prices of the two products and the rupee versus US dollar exchange rate.
“The movement of prices in the international oil market and INR-USD exchange rate shall continue to be monitored closely and developing trends of the market will be reflected in future price changes,” the company had said on July 31.
The drop in the rates of the Indian crude basket could also act as a trigger for a a cut in prices of petrol and diesel. According to the Ministry of Petroleum and Natural Gas, the rate at which Indian refineries bought crude oil dropped to $41.82 per barrel on August 11 as compared to $43.2 per barrel on August 1.
Currently, petrol costs Rs 61.09 a litre in Delhi while diesel costs Rs 52.27 a litre.
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