A day after Congress president Sonia Gandhi suggested a review of fuel prices, the government on Wednesday announced a cut of Rs 2 per litre in petrol and Re 1 in diesel prices from midnight tonight.
"In view of the softening international oil prices... the government under the guidance of Prime Minister Manmohan Singh has decided to reduce retail selling price of petrol by Rs 2 per litre and that of diesel by Re 1 per litre with effect from midnight tonight," Petroleum Minister Murli Deora said in a statement in Rajya Sabha.
Deora had met Singh on Tuesday to discuss the cut in fuel prices as a follow up to the suggestion made by Gandhi in the Congress Parliamentary Party meeting.
Sources said oil marketing companies are currently making a profit of Rs 3.67 a litre on petrol, which will come down by Rs 2 after the price cut.
On diesel, the companies are making a loss of Rs 1.01 a litre, which will increase to about Rs 2 a litre.
Profit on petrol sales is about Rs 78 crore (Rs 780 million) a day at present, while the loss on diesel is Rs 34 crore (Rs 340 million).
Sources said the loss on diesel is likely to double, while that on petrol will come down to Rs 25 crore (Rs 250 million) a day.
Inputs: PTI
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