In the second price cut by oil marketing companies (OMCs) this month, petrol prices were reduced by up to Rs 3 per litre from midnight. In a statement, Indian Oil Corporation said: “It has been decided to revise petrol prices downwards by Rs. 2.46/litre (excluding state levies). The downward revision shall vary from Rs 2.46/litre to Rs 3.22/litre (including State levies) depending upon the State taxes.
On June 2, the three OMCs – Indian Oil, Bharat Petroleum and Hindustan Petroleum – had reduced the base price of petrol by Rs 1.68 per litre excluding VAT/sales tax.
The new prices of petrol per litre in some key cities are:
The Indian Oil press statement adds that, “During the current fiscal, the Corporation has already accumulated losses of Rs 1,053 crore (Industry: Rs 2,323 crore) on petrol sales during April-May 2012 due to the inability of OMCs to revise MS selling prices in line with high level of international oil prices and the eroded US dollar to Indian rupee exchange rates prevailing during that period.”
While the petrol price cut might bring some respite to petrol car owners, vehicle manufacturers are seeing far fewer footfalls in their showrooms and a sharp downturn in their sales, resulting in fast-rising inventory pile-ups.
Maruti Suzuki, the country's largest carmaker, has cut production of some petrol models, including the best-selling Alto, as sales have declined due to high fuel costs. GM India too has announced a production cut with plans to halt production at its plants for one day a week until the festive season in October. Expect other manufacturers to follow suit.