This is the first reduction in pump prices in over a year and lifts the freeze on regular revisions since February 28. TOI had on Tuesday reported the pump prices were about to be reduced.
Consumers can look forward to a spell of price cuts but a shipwreck in the Suez Canal on Wednesday, blocking the flow of oil from the Persian Gulf, could play spoilsport by pushing up oil prices again.
Global benchmark Brent crude jumped 4% on Wednesday to $63.20 per barrel on the news of the shipwreck. It had dipped to $61.93 as a resurgence of Covid-19 cases in many countries – including India, the world’s third-biggest oil consumer – and lockdown in Europe dashed hopes of early demand recovery.
Wednesday’s price cut has been made possible by the cost of Indian Basket, a mix of Brent and Dubai-Oman grades, declining 8% over the last fortnight.
India’s crude cost stood at $62.71 per barrel on Tuesday, down 8% from $68.42 on March 8. Brent has declined 11% during this period after cracking $70 per barrel.
The fortnight’s slide in crude prices will lower pump prices gradually in the coming days since pump prices are based on a 15-day rolling average price of products and the rupee-dollar exchange rate.