Oil OMCs to cut petrol, diesel prices by 40 paisa from November 1

State-owned oil marketing companies (OMCs) are likely to reduce the prices of petroleum products such as petrol and diesel by 40 paise a litre from November 1, 2022, as the price of international crude oil fell.

According to the report by CNBC Awaaz, the reduction in prices by 40 paisa daily is likely to continue for the next five days and a total reduction of Rs 2 in petrol and diesel prices in installments, sources privy to the developments told CNBC-TV18.

Global oil benchmark Brent crude fell more than $1 today on expectations that US production could rise even as weaker economic data out of China and the country's widening COVID-19 curbs weighed on demand.

Brent crude futures dropped $1.22, or 1.3 percent, to $94.55 a barrel. US West Texas Intermediate (WTI) crude fell $2.41 to $85.49 a barrel, a 2.7 percent loss. Both benchmarks, however, are on track for their first monthly gains since May.

State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are supposed to adjust petrol and diesel prices daily in line with the cost, but they have been since November 2021 moderating pump rates.

India is 85 percent dependent on imports to meet its oil needs and so local pump rates are benchmarked against international prices. Fuel prices, particularly diesel, have a cascading effect on inflation as an elevated price will lead to higher transportation costs, spiking prices across the board, including essentials like vegetables.

Petrol and diesel prices were last revised to align with the cost on April 6 and have been on freeze since then. In May, rates were reduced after the government cut the excise duty on petrol by Rs 8 per litre and that on diesel by Rs 6.

Despite a surge in oil prices, the three state fuel retailers first froze petrol and diesel rates for a record 137 days beginning in early November 2021 when five states, including Uttar Pradesh, went to the polls and then went into a hiatus again in April.