Fuel prices in the country have been facing a slow but continuous reduction for the past 41 days. Petrol prices per litre were lowered across Indian cities today to be priced at Rs 72.87 in New Delhi, Rs 78.43 in Mumbai, Rs 74.88 in Kolkata and Rs 75.62 in Chennai. Diesel prices per litre were also reduced, selling at Rs 67.72 in New Delhi, Rs 70.89 in Mumbai, Rs 69.57 in Kolkata and Rs 71.52 in Chennai.
The constant decline in fuel prices by the Indian state-owned marketers since 18 October has wiped off the previous 2 months of price rally that began on 16 August. They are now at their 8-month low, the lowest since April. On 4 October, petrol price had hit its all-time high of Rs 84 per litre in New Delhi and Rs 91.34 per litre in Mumbai. Diesel on the same day was priced at its all-time high of Rs 75.45 a litre in New Delhi and Rs 91.34 in Mumbai.
These prices at which fuel is sold commercially in India are set by the oil marketing companies based on the previous day's crude rates in the international market. On Thursday, Brent crude, the international benchmark, fell to $57.50 a barrel. The decline comes on account of the record high US and Saudi Arabian crude inventories, raising concerns among analysts that the market may be oversupplied in the coming months if the output is not cut anytime soon.
In the last 40 days, international rates have fallen sharply, losing over $15 a barrel, and experts say that the rate at which Indian retail fuel prices were lowered is comparatively slower, leaving a higher profit margin for the dealers and providing less than expected relief to consumers.