Petrol, diesel price cut: Though an official confirmation is awaited, sources have claimed that the Narendra Modi-led government is contemplating on massive cuts of approximately Rs 8 per litre in the retail prices of petrol and diesel. The big announcement can be made before December 31, said sources. 

Sources have learned that the Petroleum Ministry has made a proposal suggesting cuts ranging from Rs 8 to Rs 10 per litre in both petrol and diesel. The proposal is yet to get the Prime Minister’s approval. 

Reports suggested that the reduction in prices might serve as an indication from the ruling party, signalling its inclination to declare early general elections and capitalise on the landslide victory in three Hindi heartlands- Madhya Pradesh, Rajasthan and Chhattisgarh. 

For the unversed, Petrol and diesel prices have been on a freeze since April 6 last year. Petrol costs Rs 96.72 a litre in the national capital and diesel comes for Rs 89.62 per litre. 

On May 22, 2022, the central government slashed excise duty on petrol and diesel, reducing it by Rs 8 and Rs 6 per litre, respectively. This strategic move aimed to mitigate inflation, as both petrol and diesel significantly contribute to the Wholesale Price Index (WPI), holding respective weights of 1.60 per cent and 3.10 per cent in the overall WPI calculation.

Last month, it was reported that state-owned fuel marketing companies may revert to daily revision in prices of petrol and diesel. Three state-owned fuel retailers -- Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) -- made bumper profits in April-September -- first half of the current fiscal -- but considering the low earnings of last year, they are yet to recoup all losses.