India's state-owned oil marketing companies have cut the retail prices for petrol and diesel for the second time in April due to favourable currency rates and cheap crude oil prices, however, consumers should not get carried away by the latest cuts, as crude oil prices started rebounding from their lows on the back of fall in the US oil production.
The Indian Oil Corp (IOC) on Wednesday slashed retail prices for petrol by ₹0.80 a litre and diesel by ₹1.30 a litre effective from 16 April.
After the cut, petrol will be sold at ₹59.20 per litre in Delhi and diesel at ₹47.20 per litre.
"Since last price change, the trend of international prices of petrol and diesel and INR-USD exchange rate warrant a further downward revision in prices, the impact of which is being passed on to the consumers with this price decrease," said The Economic Times quoting IOC statement.
The oil companies also revised down prices of petrol and diesel on 1 April by ₹0.49/litre and ₹1.21/litre respectively.
However, current scenario in the global crude oil markets remain different, with Brent crude oil price trading at $63 per barrel, the highest price level this year.
Crude oil prices have gained more than 20% since March on the back of decline in US oil production, a key factor that has driven oil prices lower since June last year.
Further, current appreciation in the rupee which is making oil imports cheaper for the companies may prove temporary, as the US central bank rate hike may lead to heavy outflows from emerging countries such as India, triggering sharp depreciation of the currency.
"The movement of prices in international oil market and INR-USD exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes," IOC said.