By Prarthana Mitra
Minutes after the Indian Oil Corporation (IOC) posted that it had cut fuel prices by 60 paise, the nation’s largest fuel retailer issued a clarification saying the cut was actually by 1 paise, putting an end to customers celebration.
After the 1 paisa cut, petrol in Delhi now costs Rs 78.42 per litre and diesel Rs 69.30, the lowest rates among all metros and state capitals. Mumbai which has the highest rate in the country stands at 86.23 per litre.
Here’s what happened
With fuel prices at an all-time high, the news of the price cut was welcomed by all after the oil companies announced Wednesday morning a reduction in petrol price by 60 paise and diesel by 56 paise to Rs 68.75 in Delhi. However, the joy was short-lived as this was soon rectified to a reduction of 1 paisa a litre.
“The reduction was supposed to be 1 paisa but due to a clerical error the price prevalent on May 25 was communicated as today’s price,” a senior official of IOC explained to the Economic Times.
According to the Times, the price change today is based on the average international rate from the fortnight beginning May 16 to May 30. “There is a softening in international oil prices and rupee has strengthened against the US dollar, making imports cheaper. All this will reflect in reduction in retail rates in coming days,” the IOC official explained.
Kerala’s challenge to the centre
However, the Kerala government later that announced an imminent reduction in the prices of petrol and diesel by Re 1 in the state from Friday, June 1. With this, Kerala becomes the first state to announce a cut in fuel prices.
“This will amount to loss of Rs. 509 crore for the state government. This is our message to the central government. At a time when the nation has been demanding a reduction in prices, the central government hasn’t done anything”, Chief Minister Pinarayi Vijayan said.
Rates had touched an all-time high on Tuesday—Rs 78.43 per litre for petrol and Rs 69.31 a litre for diesel in Delhi. Last week, the government had assured that it was working on a long-term solution to address the volatility in fuel prices. Economic Affairs Secretary Subhash Chandra Garg on Monday declared that fuel prices were expected to deflate this week.
Whether the price cools further to the benefit of the common pass remains to be seen, especially in light of the softening in international oil prices and strengthening of the rupee against the US dollar.
Prarthana Mitra is a staff writer at Qrius.
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