It’s a happy Diwali for India on the fuel-price front.
Softening global crude prices and excise duty cuts are beginning to have a positive impact on the retail prices of petrol and diesel in India. Both have generally been on a downward slide since their peak on Oct. 04, which had forced the government’s hand.
In the latest round of cuts, on Thursday (Nov. 08), petrol prices in New Delhi were slashed by oil marketing companies (OMCs) to Rs78.21 ($1.08) a litre—down 21 paise a litre from the previous day and a roughly Rs6 drop from the peak of Rs84 a litre last month.
In financial capital Mumbai, petrol prices were cut by 2 paise a litre. At Rs83.72, the fuel is now cheaper by Rs7 a litre from its peak of Rs91.34.
Petrol prices have cooled off more than those of diesel, which is now available for Rs72.89 a litre in Delhi—roughly Rs2 lower than its Oct. 04 peak. In Mumbai the fuel now costs Rs76.38 a litre—about Rs4 lower than the peak.
The steady fall in the last month has brought much-needed relief for consumers.
Fuel prices had become a cause for concern for prime minister Narendra Modi’s government, too, especially with elections just months away. Consumer price index (CPI)-based inflation stood at 3.77% in September, up from 3.69% in August.
In a bid to rein in fuel prices, on Oct. 04, the government announced the slashing of excise duty on petrol and diesel by Rs1.50 per litre and asked India’s oil marketing companies to further subsidise the fuels by another Re1 a litre. Following the announcement, prices fell by around Rs2.50 per litre across the country.