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Petrol price cut by Rs 2

New Delhi, June 2: Petrol prices were cut by about Rs 2 a litre from midnight by state-run oil firms, a partial reduction of the Rs 6.28-plus increase over a week ago.

Motorists in Calcutta will now have to pay Rs 75.81 for a litre.

The partial reduction did not satisfy the Opposition. The BJP and the CPM demanded a full rollback of the hike.

“We could have cut more had the rupee not depreciated against the dollar sharply during the fortnight,” P.K. Goyal, director, finance, IOC, said.

“Though international gasoline prices decreased significantly, the dollar-rupee exchange rate deteriorated further. Since petrol is a de-regulated commodity…, we are passing on the reduction to consumers.”

The average gasoline price in the first week of May was $124.42 a barrel, and it had declined to $115.81 a barrel. However, during the fortnight, the rupee weakened from Rs 53.17 to 54.96 against the dollar.

Junior petroleum minister Ratanjit Pratap Narain Singh said: “The government has no control on petrol prices. It is not a rollback and it has nothing to do with the Opposition. It depends on OMCs (oil marketing companies) as they review prices every 15 days.”

Ravi’s profit punch

Overseas affairs minister Vayalar Ravi has asked petroleum minister S. Jaipal Reddy how oil companies IOC and BPCL had declared huge profits if prices had been hiked on the pretext of losses.

In a letter to Reddy dated May 29 (before today’s price was announced), Ravi said he had been surprised to read in the newspapers that IOC made a profit of Rs 12,670 crore in the January-March quarter against the Rs 3,905 crore profit in the same quarter last year.

Ravi talked about BPCL announcing a net profit of Rs 3,962 crore in January-March 2012 against Rs 932 crore in the same quarter last year.

He said oil companies’ claims that they were running at a loss were not true and demanded a “close scrutiny” of their financial status before the next price hike.

State-owned oil companies, however, said that they continued to incur losses by selling diesel, kerosene and domestic LPG below cost. IOC said it was losing Rs 12.53 per litre of diesel, Rs 30.53 per litre of kerosene and Rs 396 per LPG cylinder.

In 2011-12, IOC, HPCL and BPCL had together lost Rs 138,541 crore in revenue. But they were compensated by the government and ONGC, Oil India and Gail India, which helped them declare robust profits.

Some Congress leaders felt that Ravi’s letter should be seen in the context of a key bypoll in Kerala today. A.K. Antony, another Congress minister from Kerala, had criticised the petrol price hike, a stand that was described by other party leaders as “electoral necessity”.

The Congress Working Committee, which is meeting on Monday, is expected to discuss economic issues.