Fuel prices continue to slump; petrol at Rs 85.04/litre in Mumbai

Fuel prices continued the downward movement on Tuesday with petrol and diesel being at their lowest levels in two months across all the major cities.

The prices in Mumbai stood at Rs 85.04 a litre and Rs 77.32 a litre for petrol and diesel, respectively. Petrol is down Rs 6.30 from the record level of Rs 91.34 a litre while diesel is down Rs 2.78 from the record level of Rs 80.10 a litre seen on October 4 in Mumbai.

In New Delhi, Kolkata and Chennai, petrol was at Rs 79.55 per litre, Rs 81.43 per litre and Rs 82.65 per litre, respectively, while diesel stood at Rs 73.78 a litre in New Delhi, Rs 75.63 per litre in Kolkata and Rs 78 a litre in Chennai.

As per the country's pricing mechanism, under the daily dynamic pricing regime, domestic fuel prices depend on international fuel prices on a 15-day average, besides the value of the rupee.

Prices vary from region to region due to local taxes as the product is excluded from the GST regime. Delhi has the lowest tax rate among the four metro cities.

The downward revision also comes on the back of multiple factors such as lower international crude oil cost and a recovery in the rupee against the US dollar. Front-month Brent crude oil futures were at $76.78 a barrel at 0040 GMT, down 56 cents, or 0.8 percent, from their last close.

Since mid-August, petrol and diesel prices have been on the rise. This has been the longest, in the recent past, that the fuel prices have been slashed. Various factors including rupee depreciation, high excise duty and rise in Brent crude oil rates have led to soaring domestic fuel prices.

Earlier this month, the government reduced excise duty on petrol and diesel by Rs 1.50 per litre and said the oil marketing companies (OMC) will absorb the impact to the tune of Re 1 per litre.