Oil cos put off petrol price cut due to weak rupee
New Delhi: State-owned oil firms have decided to "wait-and-watch" the international scenario and the rupee-dollar rate before deciding to cut petrol prices.
"The Greece vote is behind us now. But the Fitch rating downgrade has led to a sharp fall in rupee against the US dollar. There is high volatility in the market. For now we will watch the situation," said a top official at one of the three state-owned oil firms.
Indian Oil, Bharat Petroleum and Hindustan, as per practice, were to revise petrol price from June 15 but put off the decision by a couple of days. On Monday they decided to wait and watch for some more time.
"There is no revision in petrol rates today or even tomorrow. We will watch the situation for next couple of days before taking any decision," he said.
Oil firms had last cut petrol rats by Rs 2.02 a litre with effect from June 3 in a partial rollback of the steep Rs 7.54 per litre hike effected last month.
Petrol at present costs Rs 70.24 a litre in Delhi.
Sources said the last revision was done keeping in mind an average of USD 115.77 per barrel rate of gasoline, against which domestic petrol prices are benchmarked. Gasoline rates have since fallen to USD 106.93 per barrel. But the rupee has devalued to Rs 55.69 to a US dollar from Rs 54.96 to a US dollar.
There was a scope to reduce petrol price by up to Rs 1.60 per litre but with rupee falling further, the cost of imports has again risen.
"Today, rupee dropped 53 paise to close at Rs 55.93," the official said. "There is excessive volatility".
Oil prices advanced in Asian trade today, mirroring gains in broader asset markets after Greece's pro-austerity parties won a tight general election.
New York's main contract, light sweet crude for July delivery advanced 90 cents to USD 84.93 a barrel and Brent North Sea crude for August delivery surged USD 1.48 to USD 99.09 in morning trade.
Greece's two main parties narrowly clinched enough votes yesterday to form a government. There were fears that a victory for anti-bailout radicals would have led to the country being forced out of the euro-zone.
State-owned oil firms informally consult their parent ministry before revising prices.
Indian Oil, Hindustan Petroleum and Bharat Petroleum had over the past one week indicated of a scope of reducing rates from June 1 but decided against doing so just now, the official said.