Oil prices may get reduced further

ONE MORE good news before the Lok Sabha election. The rate of diesel may be reduced by Rs 2 soon. The latest effort by the Union government would certainly help it get more votes in the coming Lok Sabha election.
A cut in diesel prices would also reduce the prices of essential commodities like rice, edible oil, fruits, vegetables, eggs, milk, etc.
While speaking to the media, a government official on condition of anonymity said, “Political pressure is mounting on the government to reduce the auto fuel price in the next couple of days before the model code of conduct gets effective. There is a margin to reduce diesel price further but till now there is no such move by the petroleum ministry.
The final authority lies with the Cabinet, which is expected to meet anytime this week.”
The public sector oil companies are presently making a profit of Rs 4.44 a litre on diesel. The Union government reduced fuel prices twice in less than two months. The retail rate of petrol was reduced by Rs 5 a litre, diesel by Rs 2 a litre and cooking gas by Rs 25 for a 14.2 kg cylinder on January 28, 2009. The prices of petrol and diesel were cut off by Rs 5 a litre and Rs 2 a litre, respectively, in December, 2008.
While speaking to the media, a government spokesperson said, “In December last year, the Cabinet had in-principle favoured deregulating petrol and diesel prices and that proposal has not been abandoned.”