As global oil prices hit a five-and-a-half year slump, oil companies effected price cuts for Aviation Turbine Fuel (ATF) and non-subsidised cooking gas on Thursday. While the non-subsidised LPG price was cut by Rs. 43.50 per 14.2 kg cylinder, ATF prices were reduced by 12.5 per cent.
In another development, the government hiked the excise duty on diesel and petrol by Rs. 2 a litre each to fund its “ambitious infrastructure” programme. However, the hike will not impact retail prices, an Indian Oil Corporation official told The Hindu.
“In order to fund the ambitious infrastructure development programme of the government, particularly the building of 15,000 km of roads… the government has decided to increase basic excise duty on petrol and diesel [both branded and unbranded] by Rs. 2 per litre. Allocation of these resources to the road sector will also spur economic activity and employment generation,” a Finance Ministry statement said.
The revised excise duty would be effective from Thursday midnight.
Non-subsidised LPG will now cost Rs. 708.50 in Delhi, down from the existing Rs. 752.
Possibly the sharpest cut since it was deregulated in 2002, ATF or jet fuel would cost Rs. 52,422.92 per kilolitre in Delhi, down by Rs. 7,520.52. In Mumbai, it would cost Rs. 53,861.58/kl down from Rs. 61,695.45/ kl.
This is the sixth consecutive reduction in jet fuel prices since August last year, with the last cut announced on December 1 when prices were reduced by 4.1 per cent.
Asked whether the trend would continue, Indian Oil spokesperson Amresh Kapoor said prices were reviewed fortnightly and the last review was done on Wednesday.
Prices of global benchmark Brent crude which fell 49 per cent during 2014, hit $53 on Wednesday, with demand continuing to weaken amid a supply glut owing to the U.S. shale boom and the Organization of Petroleum Exporting Countries (OPEC) refusing to cut production.
