Further petrol, diesel price cuts likely as crude oil dips to four-year low

Following the recent multiple reductions in petrol rates and deregulation of diesel prices by the government in October, fuel consumers can look forward to more price cuts as Brent crude oil fell to its lowest in four years at US $82 a barrel on Tuesday after Saudi Arabia cut sale prices to the United States.

The basket of 12 crude oils of the Organisation of Petroleum Exporting Countries (OPEC), which include Saudi Arabia, closed at US $80.64 a barrel on Monday compared to US $81.97 last Friday (Oct 31), the OPEC Secretariat said.

It was reported that OPEC members Venezuela and Ecuador are working on a joint proposal to defend oil prices, but the United Arab Emirates oil minister said the country was "not panicking".

Announcing the diesel price deregulation in October, Finance Minister Arun Jaitley had said, "Price of diesel will be linked to the market, and therefore, depending on whatever is the cost involved, is the element that consumers will have to pay."

Jaitley had added, "Just like petrol prices, diesel cost will now be governed by market forces. The diesel prices were being increased by 50 paise or so over the last few months. The prices should come down as the global crude oil prices have dropped substantially in recent times."

Petrol and diesel prices were last cut on Saturday by over Rs 2 per litre each.