Govt weighs Rs 10/litre cut in petrol price by next week

The government is toying with the idea of reducing the price of petrol by up to Rs 10 a litre — double the amount by which it was raised in June — diesel by Rs 3 and cooking gas by Rs 20 per refill in the wake of crude prices looking set to hover around $45 a barrel in international markets. A reduction in fuel prices has been in the offing since September when crude started to slide from its mid-July peak of $147/barrel. But the higher amount being considered for reduction is part of an overall strategy to put money into people’s pockets in the hope that it may spur demand or help in taking some pressure off other areas. A set of proposals, outlining the economics and combinations for reducing fuel prices, may be taken to the Cabinet next week by when the results of all state elections — except J&K — are out. The imperative for a hefty cut in fuel prices also increases as it is expected to bring some cheer in the aftermath of the attacks in Mumbai.