Wednesday, October 15, 2008

Petro prices to be cut if crude falls

Someone in the government is reading my blog. At least I like to think so ;-)

There is a news of expected cut in petrol prices (see here) in Deccan Harald dated 15th Oct, 2008.

This follows my blog on "So ... do we get cheaper petrol, diesel?" dated 11th Oct, 2008.

Feels great:-)))))) even if it all in my imagination.

Note: The photgraph used here belongs to Ramasamy Chidambaram. To see more of his photographs, visit his gallery here.

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Venkat said...

amitabh, with the rupee continuing its depreciation against the dollar, will oil cos oblige us with a price-cut? they can easily claim that oil imports are still costlier in rupee terms.

Amitabh said...

Thanks for your comment. Yes, there is a danger of falling back upon a weak Re to justify the increased petrol price.
But consider two points:
1) The Re has gone up by about Rs 3 per $. For the sake of argument let's assume it goes up by Rs 5 (any more might mean another crisis - our imports still are more than pur exports).
2) The Oil price has fallen by more than $50 and sliding.

So the weakenng of Rs is not proportional to the drop in oil prices. (If the price of crude had fallen just because of strong dollar that would have been the case. It is falling due to reduced demand.)

Therefore, I am hoping GOI will not use this excuse. And in any case, the UPA govenment will do everything possible to come back to power. So we might get some relief.

Here's hoping for the best.


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