NEW DELHI: The government on Friday slashed prices of petrol and diesel by Rs 5 and Rs 2 a litre, respectively, with effect from midnight. The
price cut, the first in over two years, will come as a relief to fuel consumers, tame inflation and boost demand in the economy. On the flip side, the move will shrink oil companies’ margins, which had just begun improving with the fall in crude oil prices.
The announcement by petroleum minister Murli Deora comes ahead of Saturday’s demand booster package and a Reserve Bank of India rate cut, which are expected to give an impetus to demand. Mr Deora told reporters after a meeting of the Cabinet Committee on Political Affairs that Wednesday’s reduction was an ”interim measure” and that the government would continue to watch the global prices of crude oil and react accordingly.
Ful story at Economic Times
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