Diesel price may come down
for first time in 7 years
Rajeev Jayaswal, ET Bureau | Sep 9, 2014, 11.52AM IST
NEW DELHI: India is considering a cut in diesel prices for the first time in seven years amid global crude price dropping below $100 a barrel for the first time in more than a year, a move that could take some of the sting out of inflation as a patchy monsoon threatens a rise in food prices.That in turn could allow the central bank to ease up on its interest-rate stance at the next mone tary policy announcement, boosting revival prospects.
This comes as the government has been considering freeing up diesel prices, since subsidy has been narrowed by incremental, monthly price increases.
"If this downward trend in international oil prices continues and the rupee appreciates even marginally, there will be over-recovery from this month," said a senior executive at an oil PSU who didn't want to be named.
"We intend to pass this to customers," said the executive. " A price review is expected on September 15.But the decision regarding diesel price cut will be taken by the government because it is a regulated fuel."
The government is still evaluating the political situation in poll-bound states before deregulating the fuel, government and industry officials said.
Benchmark Brent crude fell on Monday to a 14-month low of $99.59 per barrel, dropping below $100 for the first time since June last year because of sluggish demand from major importers, particularly China. Meanwhile, the rupee has appreciated marginally against the dollar, which has almost aligned pump prices of diesel with market rates.
Diesel price may come down for first time in 7 years - The Times of India
for first time in 7 years
Rajeev Jayaswal, ET Bureau | Sep 9, 2014, 11.52AM IST
NEW DELHI: India is considering a cut in diesel prices for the first time in seven years amid global crude price dropping below $100 a barrel for the first time in more than a year, a move that could take some of the sting out of inflation as a patchy monsoon threatens a rise in food prices.That in turn could allow the central bank to ease up on its interest-rate stance at the next mone tary policy announcement, boosting revival prospects.
This comes as the government has been considering freeing up diesel prices, since subsidy has been narrowed by incremental, monthly price increases.
"If this downward trend in international oil prices continues and the rupee appreciates even marginally, there will be over-recovery from this month," said a senior executive at an oil PSU who didn't want to be named.
"We intend to pass this to customers," said the executive. " A price review is expected on September 15.But the decision regarding diesel price cut will be taken by the government because it is a regulated fuel."
The government is still evaluating the political situation in poll-bound states before deregulating the fuel, government and industry officials said.
Benchmark Brent crude fell on Monday to a 14-month low of $99.59 per barrel, dropping below $100 for the first time since June last year because of sluggish demand from major importers, particularly China. Meanwhile, the rupee has appreciated marginally against the dollar, which has almost aligned pump prices of diesel with market rates.
Diesel price may come down for first time in 7 years - The Times of India
