Reliance to slash petrol and diesel prices from October 1

New Delhi, Sep 29 (UNI) Reliance Industries Ltd (RIL) today said that it would cut petrol and diesel prices by a rupee from October 1.

The move comes close on the heels of falling global crude oil prices, and would come closer to the prices offered by the state-owned oil marketing companies, company sources told UNI.

The company had hiked the prices of petrol and diesel in a bid to keep up with galloping global oil prices with diesel and petrol costing Rs 2.52 and Rs 2.92 more than what the public sector oil companies are selling.

Experts say that this led to a sharp slide in its market to 1 per cent from 15 per cent before the price hike was effected at its 1,280 outlets. About 450 are company-owned while the rest are franchisees.

Despte repeated pleas, Reliance could not get concessions available to government owned oil companies. This enables them to buffer the consumer from price hikes.

The company's petition seeking compensation of Rs 1,187 crore from the government for selling products below cost during FY06, was recently rejected by the government.

This included Rs 103 crore under recovery on petrol and Rs 1,084 crore on diesel.

About 8.68 million tonne of petrol and 40.31 million tonnes of diesel is sold by government companies - Indian Oil, Hindustan Petroleum, Bharat Petroleum and IBP - sell.

While Reliance retails 342,000 tonnes of petrol and 3.6 million tonnes of diesel.

The Reliance move comes in the wake of the government reiterating that there will be no cut in prices of petrol and diesel against the backdrop of falling global price of crude.

''It is not appropriate to cut prices now. When crude touches 50 dollars a barrel, we may think about that,'' the Petroleum Minister Murli Deora said. said.

The decline has cut the losses of oil companies on sale of petrol, diesel, domestic LPG and kerosene. But this still has not made selling fuel profitable.

''Losses are still there. I wish international prices fall further,'' the Minister said.

The government had, in June, raised petrol and diesel prices by Rs 3 and Rs 2 per litre, respectively, as a fallout of the spike in crude oil prices. The hike, however, was not enough to cover for the rise in cost of raw material (crude oil), and public sector oil companies were asked to bear a substantial part of the loss on fuel sale.

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