"Any advantage of price (reduction in international rates) and rupee (appreciation against US dollar) will be passed on to consumers... consumer will get full advantage," Moily said, pointing out that petrol is priced according to market d ynamics. This will be the first cut in petrol price since May. TOI had first reported on October 12 that the trend in crude price and the rupee's exchange rate would result in a price cut by month-end.
On his conservation plans, Moily said, "I will either take the Metro or a bus to work every Wednesday starting from October 9. It's a voluntary act (for others). I cannot punish anyone not taking public transport but I want everyone from the highest ranking officers to the lowest to take public transport every Wednesday."
A circular regarding this is being issued urging officers in the oil ministry and 14 companies under it. Moily has written to chief ministers, central ministries and heads of government companies to declare one day of the week as 'Bus Day'.But sceptics doubt if Moily's plan at saving fuel will succeed since most cities do not have efficient transport systems. Industry watchers say pricing reforms is the best way to promote efficient use or control demand since subsidy promotes inefficiency.
They point out that the growth rate in diesel car sales tapered the moment subsidy gap narrowed with petrol some months ago. Another example is cooking gas, the demand for which has come down substantially since the government capped the number of subsidized cylinders in a year for each household.
Moily has suggested introduction of staggered office timings for government employees to decongest road traffic during peak hours and asked the urban development minister to introd uce "free cycle scheme" in select cities to save fuel.
Meanwhile, diesel price will continue to rise by 50-60 paise per litre every month, as per a January decision, till elections in five states are over. After that, the government is expected to go for a one-time hike in diesel price or decide on fortnightly revision like in the case of petrol.
Petrol price was last cut on May 1 by Rs 3 per litre, the steepest reduction in over five years. Since then, the price has been raised seven times, aggregating Rs 10.80 per litre, excluding VAT, as rupee depreciated sharply against the dollar. Since June 1, the price in Delhi has surged by Rs 13.06 per litre after including state tax.
State-run fuel retailers last raised petrol price by Rs 1.63 a litre, excluding VAT, on September 14. Market leader IndianOil at t he time said during the first fortnight of September, the average international price of petrol was $117.40 a barrel and the currency exchange rate averaged Rs 63.88 to a dollar. Since then, both have improved to warrant a reduction.
via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGMiv8WB7nLCbUK3XiWZ1LS1-NRdg&url=http://timesofindia.indiatimes.com/business/india-business/Petrol-price-cut-soon-Moily-says/articleshow/23178114.cms
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