While oil companies in Pakistan cut petrol prices by as much as Rs 6 a litre on Oct 1, the situation in our country is markedly different. Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum Corporation last slashed petrol prices by Rs 2.02 on Jun 3.
Reports say that these firms profited by nearly Rs 2 per litre in the second half of Sept. However, they seem to be reluctant to pass on some of the benefit to consumers.
Even executives at the oil companies admit that they can well reduce the price. "Yes, there is about Rs 1.60 per litre profit on petrol since Oct 1. But we want this trend to stabilise before we think of cutting retail prices," one of them said.
"We are committed to passing on any gains that we make but all we are wanting to ensure is that this is not a temporary trend which can reverse in the near future," he added.
His words are a clear giveaway that Pakistani motorists will continue to be the envy of their Indian counterparts for some more weeks at least.
Incidentally, the rupee is at a five-month high. In morning trade, it went up to 51.97 against the American currency. Back in the third week of Aug, the rupee was ruling at around 55 to the dollar.
Since petrol prices become cheaper by 77 paise whenever the Indian currency gains a rupee against the dollar, clearly the three state-owned oil firms are making healthy profits.
Moreover, every one-dollar fall in crude oil prices means that petrol prices become automatically cheaper by 33 paise. It is worth noting that the international crude oil prices of Indian basket declined to 110.45 dollars per barrel on Oct 2. The prices were around 114 dollars per barrel in the first fortnight of Sept.
Given the aforementioned facts, oil firms should ideally be reducing the petrol prices. When they will do so is the million dollar question. Hopefully, they won't delay the decision too much.