According to analysts, the movement of rupee against the dollar holds key for the future price movement of petrol in the domestic market.
Recently, the price of petrol was reduced by oil marketing companies (OMCs) for the second time since 9 October 2012 because of the decline in crude oil prices in the international market.
Global Gasoline Rates helps in creating a benchmark in fixing the price of petrol in the domestic market. The gasoline rates also witnessed a fall in rates globally thereby allowing Indian oil companies to reduce petrol price.
But the exchange rate of rupee, which is another factor determining the price of petrol in India, has been volatile against the US dollar. The volatility is being closely monitored by OMCs, reports suggest.
In June 2010, the centre deregulated the prices of petrol by offering freedom to the oil companies for fixing the petrol rates following the costs prevalent in the international market.
But this deregulation in the petrol prices also had no impact in getting the OMCs in getting out of the losses with which they are overburdened and this happened because of the buckling political pressure on the oil companies to have a check on curbing growing inflation in Indian market.
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