Petrol prices cut, diesel prices hiked by 50 paise a litre

Diesel price will go up by 50 paise a litre, excluding taxes, from Thursday midnight while petrol will become cheaper by Rs 1.15 a litre, oil marketing PSU Indian Oil Corporation (IOC) has said.

While the petrol price is market-linked and revised periodically depending on crude oil price in the international markets, diesel is subsidised and the government has allowed the marketing firms to hike it by a 'small amount' every month.

"Even after the current increase, under-recovery on retail diesel shall stand at Rs 9.58 per litre," IOC, the country's largest oil marketing firm, said in a statement.

"The movement of prices in international oil market and INR-USD exchange rate is being closely monitored and developing trends of the market will be reflected in future price changes," it said.

Petrol price in Delhi will be cut by Rs 1.38 to Rs 71.02 per litre while it will cost Rs 78.04 a litre in Mumbai as against Rs 79.49 currently.

This is the second cut in petrol prices in a month. Petrol price was lowered by Rs 3.05 a litre October 1 on account of softening of prices in international markets as well as strengthening of the rupee.

A government panel headed by former Planning Commission member Kirit S Parikh on Wednesday suggested an immediate increase of Rs 5 a litre in diesel prices. However, the government is unlikely to implement the expert panel's recommendation due to political compulsions as elections are round the corner.

The diesel price in Delhi has been hiked by 56 paise to Rs 53.10 per litre while it would cost Rs 60.08 in Mumbai from Friday as compared to Rs 59.46 currently.