Fuel prices cut by 20p/litre, but fail to keep pace with crude’s fall

NEW DELHI: Fuel prices came down by 20 paise per litre on Sunday, marking the first reduction in petrol price in more than a month and the fourth in diesel rate on the back of sliding crude prices.
But for the high taxes, pump rates would have dropped further as global oil prices have slid from a high of $75 per barrel a month ago to $66 this week, marking the sharpest fall since May amid fears of rising Covid cases in the US.
No wonder petrol still costs over Rs 100 in almost all parts of the country and diesel is hovering around Rs 90 except in a few states with lower VAT or those who had reduced the levy in May. Tamil Nadu recently cut state taxes by Rs 3 a litre.
Fuel retailers did not revise pump prices for more than a month though oil prices have been sliding and the rupee-dollar exchange rate also held more or less steady. Industry insiders say the retailers held the price line to partly cover inventory losses during the period.
The retailers resumed price cuts with a 20-paise reduction for diesel on August 18 but left petrol prices untouched. Each of the three subsequent cuts have been of 20 paise each as has been the first cut in petrol rate.