Petrol down, Mamata up

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Petrol down, Mamata up OUR BUREAU Nov. 15: Oil companies today announced the first cut in petrol prices since deregulation in June last year, citing global changes but gifting Mamata Banerjee a political victory. The petrol price will go down in Calcutta by Rs 2.31 a litre to Rs 70.84. "We had gained Rs 1.85 per litre, excluding all taxes, since the last price revision because of a fall in global oil rates and a marginal appreciation in rupee value. We are passing this on to consumers," the state-owned oil firms said in an identical statement. The reduction is steeper than the increase of Rs 1.80 a litre announced earlier this month, which had prompted Mamata to put the UPA on notice and warn of a pullout if rates of other fuels were raised. Although the Prime Minister had held his ground before Mamata's MPs, the synchronised price slash will help her blunt the Left claim that she was a willing partner in the policies that fuelled the price rise. Mamata today hammered home that message without sounding triumphant. "This is a positive step. This is what we had been asking for. This is what should be done, this is what we had been harping on — that prices must be reduced when they decrease internationally," the chief minister said while leaving Writers' Buildings tonight. But she did not forget to remind the Centre of her warning. "We've also been telling them to not hike prices of domestic gas and kerosene because that directly affects households," she added. The oil firms put forward economic reasons for the price cut. But just as they struggled to fight the perception that prices are often raised and rarely cut, they may find it difficult to sell the economic logic which involves figures not easily penetrable. The last time petrol prices were cut was in January 2009 when it went down by Rs 5 per litre. The companies revise the price on the basis of the fortnightly average of international oil prices and currency fluctuations. Petrol prices averaged $115.85 per barrel during the first half of November — on the basis of which the rates were cut today. In the second fortnight of October — the window that formed the basis for the Rs 1.80 hike on November 3 midnight — the same prices averaged $121.67 per barrel. The rupee's exchange rate averaged 49.20 against the US dollar this month, higher than Rs 49.40 in October. Oil company officials said the fall in global oil prices and the rise in rupee value permitted them to lower the prices. But jet fuel prices were hiked today for the second time this month. In the global oil market, prices rose marginally on higher demand from the US.

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