State-run fuel retailers on Saturday lowered petrol price by Rs 1.68 per litre, excluding state taxes. This means consumers in Delhi will pay Rs 2 less per litre at pumps. They will see an additional 92 paise cut next week after the local government notifies a reduction in the value added tax (VAT). In other states, the extent of decline will vary by a few paise due to different tax rates. Compared to May 23, when the price of petrol rose by Rs 7.92 a litre in Mumbai, Saturday’s partial rollback will see the hike coming down to Rs 5.79/litre. The combined effect of the reduction and the promised VAT cut by Delhi will pare the burden of the May 23 hike of Rs 7.54 to Rs 4.60 a litre in the capital. The announcement of the cut comes two days after the May 31 Bharat bandh by the opposition to protest against the steepest-ever increase in petrol price. The price of the fuel was jacked up by state fuel retailers citing the rupee’s fall and the rise in global prices in the first fortnight of May. The move, predictably, sparked howls of protest from parties across political spectrum, including the Congress. Soon, the heads of oil marketing companies and the government held out hope of a cut on June 1, citing emerging price trends in the Singapore bulk market for crude and gasoline—trade name for petrol. That cut should have been announced on June 1 since oil marketers review prices on the 15th and last day of each month. The pump price of petrol is arrived at by calculating the average Singapore price of gasoline in the preceding fortnight and the rupee’s exchange rate against the dollar.
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