Kerala government reduce the prices of petrol and diesel by Re 1 from June 1 said CM

The Kerala government has decided that it will reduce the prices of petrol and diesel by Re 1 in the state from Friday, June 1, said Chief Minister Pinarayi Vijayan.

With this, Kerala becomes the first state to announce a cut in the fuel prices.

Petrol and diesel prices are at an all-time high, steadily rising every day for the last fortnight. In all, petrol price was increased by Rs. 3.8 per litre and diesel by Rs. 3.38 in that fortnight. Prices vary from state to state depending on local sales tax or VAT. Delhi has the cheapest price among all metros and most state capitals. 

Today, there was a cut in the prices after 16 straight days, but just one paisa per litre. Indian Oil Corporation had earlier today announced the reduction to be in the range of 56-63 paise a litre on its website. However, within hours, India's biggest oil marketing company revised the prices on its website. 

The marginal reduction comes in the wake of some softening in global crude



prices.

Other than global crude prices and rupee-dollar forex rates, excise duty imposed by the Centre and VAT or value-added tax by the states are also responsible for the final price that consumers have to pay at the fuel stations. That is why there is a wide variation in petrol and diesel prices across different states.

Petrol and diesel prices in India are linked to Singapore gasoline prices and Arab Gulf diesel prices, which mostly track movements in crude oil prices. Crude oil prices fell to about $75 a barrel as Saudi Arabia and Russia said they were ready to ease supply curbs that have pushed crude prices to their highest since 2014, news agency Reuters reported.

Crude oil is the most expensive item on India's import bill as the country meets more than 80 per cent of its oil requirements through imports. Therefore, weakness in the rupee against the US dollar also puts pressure on domestic petrol and diesel prices. The rupee is down more than 6 per cent against the greenback so far this year.