Zee Media Bureau
New Delhi: Oil marketing companies on Friday cut petrol prices by Rs 2.42 while it cut diesel price by Rs 2.25 per litre.
Meanwhile, the government today raised the excise duties on petrol and diesel by Rs 2 a litre.
The increase, the fourth since Prime Minister Narendra Modi lifted diesel price controls in October, seeks to cash in on lower world oil prices to bolster strained government finances without stoking inflation.
However, as per the practice of revising rates every fortnight, state fuel retailers were expected to announce a cut in petrol and diesel prices yesterday as global rates had fallen by about 4 percent. But, they skipped the revision.
On the previous two occasions when they skipped revising rates, the government had raised excise duty to mop up additional revenue, thereby not passing on the benefit of fall in global oil rates to consumers.
While the fall in global oil rates is a boon for consumers, for oil companies it has meant over Rs 12,000 crore of inventory losses.
The crude oil that is being processed currently in refineries is one that was bought about 6-8 weeks back when rates were higher than present prices. By the time it is processed and marketed its market value would have come down, resulting in inventory losses.
With PTI Inputs
