New Delhi: Indian Oil Corp. Ltd on Wednesday reduced diesel and petrol prices by 1 paise per litre after automobile fuel prices reached a record high on Tuesday.

According to the latest revision, a litre of petrol in Delhi costs Rs78.42 on Wednesday, while diesel will be sold at Rs69.30 per litre at Indian Oil petrol pumps.

Earlier in the day, Indian Oil website showed that petrol price was cut by about 60 paise a litre and diesel by 56 paise, Reuters reported. However, a company spokesperson said that the company website carried wrong prices due to a technical glitch.

Petrol and diesel prices in India track the global prices of these auto fuels, not crude, though they are broadly linked to crude oil price trends, which have firmed up.

The 1 paise price cut followed after prices were raised daily since 14 May after three state-run firms—Indian Oil, Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—refrained from increasing prices since 24 April and paused it while the Karnataka election campaign was going on.

With fuel prices reaching a record high in India, there has been a demand for an excise duty cut on petrol and diesel ahead of 2019 general elections. However, the National Democratic Alliance (NDA) government has signalled its intent to stay the course on fuel pricing reforms and said that it was working toward a “long-term solution".

The 1 paise reduction on Wednesday followed after the Organization of the Petroleum Exporting Countries (Opec) and Russia agreed to ease crude oil supplies.

Earlier this month, oil prices surged above $80 per barrel due to a combination of factors such as President Donald Trump pulling out of the 2015 nuclear accord with Iran, Opec and Russia cutting supplies, falling production in Venezuela and geopolitical tensions.

With the dynamic fuel pricing introduced in June 2017, the NDA government has maintained that it has no role in pricing.

Major oil consumers such as India are concerned with the cost of the Indian basket of crude, which averaged $47.56 and $56.43 per barrel in FY17 and FY18, respectively, rising to an average of $69.30 in April 2018, according to data from the Petroleum Planning and Analysis Cell (PPAC). The price was $75.95 a barrel on 28 May. The Indian basket represents the average of Oman, Dubai and Brent crude.

Petrol prices were deregulated in June 2010 by the Congress-led United Progressive Alliance (UPA) government. The Prime Minister Narendra Modi-led NDA government decontrolled diesel prices in October 2014.

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