Oil cos put off petrol price cut due to weak rupee

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. Today they decided to wait and watch for some more time.

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"There is no revision in petrol rates on Monday or even Tuesday. 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 $115.77 per barrel rate of gasoline, against which domestic petrol prices are benchmarked.

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Gasoline rates have since fallen to $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".