Falling Oil Price forces India to cut prices of Petrol, Diesel and Domestic LPG

The Government has decided to pass on the benefit of fall in international oil prices to protect the interests of the common man by reduction in price of Petrol by Rs 5 per litre and Diesel by Rs 2 per litre at Delhi with effect from 29.01.2009. Similarly, the Government has also decided to reduce the price of Domestic LPG at Delhi by Rs 25 per 14.2 kg cylinder effective 29.01.2009.

The year 2008-09 has witnessed unprecedented volatility in international oil prices. While on the one hand, the Indian Basket of crude oil touched $142/barrel on 3.7.2008, on the other, it plummeted to $35.83/barrel on 24.12.2008. However, the average price of Indian Basket of crude oil in 2008-09 (Up to 23.1.2009) is still high at $92.13 per barrel. The average price of Indian basket of crude oil during Jan 2009 (up to 23.01.2009) was $44.12/barrel.

In spite of the softening in oil prices, the public sector OMCs incurred under-recoveries of more than Rs.1,06,000 crore during April-Dec. 2008 on the sale of Petrol, Diesel, PDS Kerosene and Domestic LPG. To partly compensate the public sector OMCs, the Government has already approved issue of Oil Bonds of Rs.60,967 crore and the upstream Oil companies have also contributed Rs.32,000 crore.

Source : Press Information Bureau

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