Petrol and Diesel Prices likely to drop as Govt Plans to Tackle Inflation
Rising Inflation Sparks Strategic Move as India Contemplates Fuel Price Cut
Petrol and Diesel Prices Latest News: In a strategic move to counter the recent surge in inflation rates and alleviate the burden of Equated Monthly Installments (EMIs), the Indian government is contemplating a reduction in the prices of petrol and diesel, with plans set in motion for implementation from January. The decision comes at a time when there has been a noticeable decline of over 3 percent in crude oil prices, providing a favorable backdrop for the potential price cut.
The Reserve Bank of India (RBI) has expressed concern over the recent uptick in inflation, prompting the government to explore avenues to bring it within the targeted range of 4 percent. The decline in crude oil prices, with American oil falling below $70 per barrel and Gulf countries' oil dropping to $73 per barrel, coincides with India's contemplation of fuel price adjustments.
What's the Plan?
The Government aims to achieve multiple objectives through this move, primarily targeting the reduction of inflation and EMI rates. With the inflation rate touching 5.55 percent in November, the government seeks to curb rising prices, especially in the food segment, where inflation reached close to 9 percent due to escalating vegetable prices.
EMI Rates Reduction
The linkage between petrol and diesel prices and EMI rates is rooted in the government's plan to influence the repo rate through the Reserve Bank of India. By curbing inflation with the help of fuel price adjustments, the government intends to create a conducive environment for the RBI to cut interest rates. The forthcoming Monetary Policy Committee (MPC) meeting in February is crucial, as it presents an opportunity for the government to signal RBI towards a potential reduction in interest rates.
The ongoing decline in crude oil prices is anticipated to continue into 2024, offering a favorable backdrop for the Indian government's plans. The differences between OPEC and the International Energy Agency (IEA) are expected to keep oil prices low, providing relief to both consumers and the government's financial objectives.
As the government contemplates these significant economic moves, there has been no change in the prices of petrol and diesel in India since May 21, marking an unusual stability during a period of fluctuating international oil prices. The current petrol and diesel rates in major cities are as follows:
- New Delhi: Petrol - Rs 96.72 per liter, Diesel - Rs 89.62 per liter
- Kolkata: Petrol - Rs 106.03 per liter, Diesel - Rs 92.76 per liter
- Mumbai: Petrol - Rs 106.31 per liter, Diesel - Rs 94.27 per liter
- Chennai: Petrol - Rs 102.63 per liter, Diesel - Rs 94.24 per liter
- Bengaluru: Petrol - Rs 101.94 per liter, Diesel - Rs 87.89 per liter
- Chandigarh: Petrol - Rs 96.20 per liter, Diesel - Rs 84.26 per liter
- Lucknow: Petrol - Rs 96.57 per liter, Diesel - Rs 89.76 per liter
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