NEW DELHI, April 01 (PTI): The cut in petrol price follows two rounds of hike in rates since February. Petrol price was hiked by Rs 1.50 a litre on February 16 and then by Rs 1.40 per litre from March 2. Both the increases were excluding local VAT.
Though petrol price had been deregulated in June 2010, they have rarely moved in tandem with cost. This resulted in Rs 500 crore loss to IOC (Rs 1,150 crore loss to state fuel retailers) during 2012-13.
However, since January, when the government decided to cut subsidises by asking oil firms to moderate prices in step with cost, petrol prices have moved in sink with cost.
Diesel prices continue to be regulated, but the government had in January authorised oil firms to hike their rates by 40-50 paise per litre every month till such time that the entire revenue loss on the fuel is completely wiped off.
Oil firms raised diesel prices by 50-51 paise per litre on three occasions since then.
IOC said in addition to losses on sale of petrol, oil firms are suffering under-recovery (revenue loss) on sale of diesel of Rs 6.52, kerosene of Rs 30.49 per litre and domestic LPG of Rs 434.50 per cylinder.
"The movement in international oil prices and rupee-USD exchange rate is being monitored and decision on future price changes shall be taken accordingly," the statement said.