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Petrol prices lowered by Rs 1.85 per litre

New Delhi: India's fuel retailers Tuesday cut petrol prices by Rs 1.85 per litre, excluding state taxes and levies, which should make its price cheaper by Rs 2.22 per litre in the national capital from midnight, bringing welcome relief to vehicle owners. The move comes against the backdrop of some allies of the United Progressive Alliance (UPA) government and opposition parties alike criticising the move earlier this month by oil retailers to hike petrol prices by Rs 1.80 per litre.
However, IndianOil Corp (IOC), the largest of the three state-run oil marketing companies (OMCs), said a fall in global crude prices and the rupee remaining stable at 49.30 to a US dollar were the reasons it could bring down prices of petrol.
The last time prices were slashed was in January 2009.
Incidentally, in early November when OMCs announced a hike in petrol prices, the rupee was still hovering over 49 to a dollar.
"IndianOil reviews motor spirit prices on fortnightly basis and based on the review, fixes prices for the next fortnight. In keeping with this practice, IndianOil has reviewed the pricing cycle as prevalent in the last fortnight," the company said Tuesday.

"The review reveals that at the current prices, there will be an over-recovery of Rs.1.85 per litre. It has, therefore, been decided to revise the MS (motor spirit) prices downward by Rs.1.85 (excluding state taxes and levies) with effect from Nov 16," the company added.

The current and new petrol prices in the four metros are as under:
                           Old                New
New Delhi         Rs.68.64           Rs.66.42
Kolkata             Rs.73.15           Rs.70.84
Mumbai             Rs.73.81           Rs.71.47
Chennai            Rs.72.73           Rs.70.38

"This is some relief for the middle class. But petrol prices are still too high when you compare them to diesel. Government should bring it down further," said Ravi Ahuja, a 26-year-old sales executive with an FMCG firm.

OMCs, however, continue to incur under-recoveries on account of selling diesel, kerosene and cooking gas below their international prices. All the three fuels are still regulated by the government, compared to petrol which is sold at a de-regulated price.
"In case of diesel, the international prices have firmed up (a trend exactly opposite to petrol) during the fortnight and as a result, the under-recovery of the company on diesel has increased from Rs.8.58 to Rs.10.17 per litre," IOC said.
The under-recoveries on kerosene and cooking gas are Rs.25.66 per litre and Rs.260.50 per cylinder, respectively. The projected total under-recovery of IndianOil for 2011-12 (excluding petrol) is estimated to be over Rs.71,000 crore and for the OMCs together would be around Rs.1,30,000 crore.
However, economics notwithstanding,Trinamool Congress supreme and West Bengal Chief Minister Mamata Banerjee Tuesday Welcomed the decision to cut petrol prices by Rs.1.85 per litre as a "positive step", and said she was very much concerned about the prices of cooking gas and kerosene.
"It is a positive step. We are happy about it," Banerjee told reporters.
Earlier this month, Trinamool -- the second largest ally of Congress-led United Progressive Alliance (UPA) -- had threatened to pull out of the government over its dissatisfaction over repeated hike in petrol prices.
Giving a temporary reprieve to the Congress, Banerjee had then said her party would not stay with the central government if price of kerosene, diesel and cooking gas was raised yet again as the Prime Minister Manmohan Singh was non-committal on the issue of further hike in the prices of petroleum products.

"We are very much concerned about the prices of domestic gas, kerosene and diesel," said Banerjee Tuesday.
The party meanwhile dubbed the decision to bring down the prices as the victory of the party supreme Mamata Banerjee.
"It is definitely a success for Trinamool and party chief Mamata Banerjee who had time again protested against the price rise of petrol. We welcome the decision as it will bring some relief to the masses who are reeling under the bane of inflation," Trinamool MP Kakoli Ghosh Dastidar told IANS.
The cut in petrol prices, by Rs.1.85 per litre, evoked mixed political response elsewhere in West Bengal with the Left Front describing it as a ploy to woo the masses before the Uttar Pradesh assembly polls.
"We have seen this ploy earlier also just before the 2009 Lok Sabha polls when the oil prices came down and were increased just after the polls. As the UP assembly polls are knocking at the door so it has been decreased to appease the masses," said Mohammed Salim, central committee member of the Communist Party of India-Marxist.
"They were under tremendous pressure both from their alliance partners and opposition parties. The UP assembly election is near so they had to put up a pro-public image, so the prices have come down," said Kshiti Goswami, state secretary, Revolutionary Socialist Party.
"The petrol prices have been increased 11 times (in 12 months) and this is the first time the oil prices have come down. So it needs to be calculated first how much has increased and how much the price has come down," said Manju Kumar Majumdar, state secretary, Communist Party of India.
The NCP Tuesday hailed the slash in petrol prices, noting that the move showed that the government has come to "some sense".
In his reaction to the cut party General Secretary DP Tripathi said, "This shows that the government has come to some sense. Therefore, I welcome the decision."
The Sharad Pawar-led NCP, an ally of the UPA, had asked the government to devise some mechanism to keep fuel prices in check after state-owned oil companies effected a steep hike of Rs 1.80 per litre on November 3.
Source: IANS/PTI