New Delhi: In a significant move, petrol and diesel prices have been reduced by Rs 2 per litre, effective from 6 am, March 15, marking the end of a nearly two-year pause in rate adjustments by state-owned oil companies. The reduction brings petrol prices in the national capital to Rs 94.72 a litre and diesel to Rs 87.62 a litre, as announced by the Ministry of Petroleum and Natural Gas.

This price cut follows a Rs 100 reduction in the price of cooking gas LPG announced last week, aiming to alleviate the financial burden on consumers ahead of the general elections. The new fuel prices across major cities are as follows: Mumbai (Petrol: Rs 104.21, Diesel: Rs 92.15), Kolkata (Petrol: Rs 103.94, Diesel: Rs 90.76), and Chennai (Petrol: Rs 100.75, Diesel: Rs 92.34), with variations due to local taxes.

The ministry highlighted that the reduction would enhance consumer spending power, aid the tourism and travel industries, contribute to inflation control, and benefit businesses reliant on transportation. This adjustment comes after a period of volatility in international oil prices, significantly impacting the economy and contributing to inflation. The pricing freeze initiated in November 2021 was maintained through fluctuations in the oil market, including the spike caused by the Russia-Ukraine conflict.

Despite pressures, the state-owned oil companies—Indian Oil Corporation, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd—resisted reverting to daily price adjustments, citing market volatility and unrecovered losses. However, their financial reports for April-December FY24 showed substantial profits, signaling a shift in strategy that culminates with this price revision.

(With inputs from PTI)