The Telegraph
Since 1st March, 1999
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Petrol, diesel prices cut

New Delhi, April 26: National oil companies sprang a pleasant surprise today by lowering prices of petrol and diesel by at least Re 1 per litre.

Petrol will cost Rs 33 per litre in Calcutta, while diesel will be priced at Rs 21.51 per litre from tomorrow. The earlier prices of petrol and diesel in the city were Rs 34 and Rs 22.52 per litre, respectively.

The decision comes close on the heels of the Re 1 per litre reduction in the prices of these fuels on April 15. According to the official policy, oil companies take a decision on revising prices every fortnight. The current reduction in the prices of petrol and diesel has come four days before the due date of April 30.

The decision has been prompted by political considerations in the immediate aftermath of the truckersí strike. The government is worried about the adverse political fallout of successive hikes in the prices of petrol and diesel this year with elections around the corner in Rajasthan, Madhya Pradesh, Delhi and Chhattisgarh.

Petroleum minister Ram Naik had assured that prices would not be increased on April 30. But the government has gone a step further and taken advantage of the softening of international oil prices to recover some of the political ground it may have lost due to the successive hikes earlier. Prices of petrol and diesel had been increased five times by as much as Rs 4.56 and Rs 4 per litre, respectively, before the two recent reductions.

Diesel is also considered a politically-sensitive fuel, as it used in the transport and the farm sectors.

The nationwide truckersí strike was a manifestation of the growing discontent on this score. With the jump in the use of two-wheelers and small cars, petrol is also being consumed by large sections of the population.

The prices of LPG and kerosene have been held in check, despite repeated complaints by the oil companies over the soaring subsidy bill that still has not been paid.

The government has, therefore, decided to stray from the economic policy line and adopt a more politically-expedient path.

The rising tax rates on petroleum products have also added to the burden of the consumers, especially as these are levied on an ad valorem basis.

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