Last hike in the price of petrol by Rs 1.80 per litre was based on the assumption that Asian crude prices may reach high at $121 a barrel in addition to falling rupee against a dollar.
Singapore crude prices have been softened to $115 a barrel, which has offset the impact of depreciating rupee. Indian petrol prices have been rising since January 2009 and has been raised relentlessly after government freed price control in last June 2010.
If this cut happens, this would be the first cut in the span of three years.
Oil marketing companies meet once in a fortnight to review the price of petrol and necessary steps to take. Further, the officials of the petroleum and natural gas ministry are also supposed to meet on November 14, where they would discuss about the possible cut in the prices of petrol after considering the rupee depreciation and global crude prices.
At present, New York's, light sweet crude oil is at $97.55 per barrel, while Brent crude oil is around $113.10 per barrel.
On the other side, the losses of oil marketing companies have partly been offset, after the finance ministry agreed on Friday to compensate them with Rs 150 billion for the losses occurred during July-September period by selling subsidised fuel.
All the three major oil marketing companies i.e. Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum have reported losses for the quarter ended September 30.
(With inputs from Reuters)