I-Day bonanza: Petrol to be cheaper by Rs 2!

Petrol price will be cut by Rs 1.89-2.38 per litre from August 15, Oil Minister Dharmendra Pradhan announced on Wednesday.

In perhaps for the first instance of a minister announcing the reduction in price of a petrol which was deregulated or freed from government control in June 2010, Pradhan took to his twitter account to say that the fuel price will be cut from midnight of August 14/15.

"Price of Petrol will be reduced from midnight of 14/15 August 2014 in the range of Rs 1.89-2.38 (Rs 2.18/litre at Delhi)," he tweeted.

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Pradhan made the announcement more than 31 hours before the price cut is to be implemented.

Till now, state-owned oil firms announced the price revision only on the eve of the change being effected to avoid hoarding by petrol pump owners.

On Tuesday, B Ashok, Chairman of Indian Oil Corp, the nation's largest fuel retailer, had indicated of a price cut on the Independence Day because of softening in international rates.

"Petrol is a decontrolled product and prices increase or decrease depending on input cost every fortnight.

“We had cut rates on August 1 and will be reviewing prices on August 15," he had said.

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State retailers revise petrol price on 1st and 16th of every month based on average international oil price and rupee-dollar exchange rate in the previous fortnight.

"There are some positive indications," he said when asked if there is likelihood of a price cut going by the average of oil price and exchange rate so far.

Oil firms had last cut rates on August 1 by Rs 1.09 per litre, the first reduction in price since mid-April.

Petrol currently costs Rs 72.51 per litre in Delhi.

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The government had in June 2010 freed petrol prices and since then rates have moved in tandem with the cost on most occasions.

For diesel, the government had in January 2013 decided to eliminate the subsidy in stages through monthly increases in prices by up to 50 paise per litre.

With monthly increases continuing, subsidy or losses on diesel have been trimmed to Rs 1.33 per litre but this will go up as there is a marginal increase in international gasoil (diesel) prices.

Diesel price revision is due only on September 1 as per the policy of raising rates every month.

Following are the revised prices of petrol in four metros after oil firms cut rates: