State-run oil marketing companies have recently cut petrol, diesel and cooking gas rates, and fuel prices may fall further in the near future, Union petroleum minister Dharmendra Pradhan on Sunday said in Kolkata ahead of the third-phase polling for the assembly elections in West Bengal.

Fuel prices were frozen since February 27 immediately after the Election Commission (EC) announced assembly elections in five states. But public sector retailers have reduced petrol and diesel rates in three small doses — by 61 paise per litre and 60 paise a litre, respectively — since March 24. State-run companies cut cooking gas price by 10 a cylinder last Thursday.

“In last few days, petrol and diesel rates have started falling. We had said earlier that when crude oil prices will fall in the international market, we will pass on the benefit to the consumer… Price of LPG (liquefied petroleum gas or cooking gas) has also started falling. It will fall further in coming days,” Pradhan told reporters.

Politically sensitive fuel prices will fall further in coming days, a senior government official with direct knowledge of the matter said on Sunday, requesting anonymity. The cut in diesel prices are expected to be steeper compared to petrol, the official said. HT reported on April 1 that a fall in fuel rates was imminent.

According to state-run Indian Oil Corporation (IOC), the country’s largest fuel refiner and retailer, prices of crude oil and petroleum product in the international market softened in the second fortnight of March due to growing worries about rising Covid-19 cases in Europe and Asia, and some concerns over side effects of vaccines.

“We are hoping international prices would remain stable and would not go up so that the benefit can be passed on to the consumer,” petroleum secretary Tarun Kapoor was quoted as saying in an HT report last week as prices of crude and petroleum products softened from a peak of nearly $70 a barrel.

Brent crude, which was below $60 a barrel until February 5, 2021, saw a strong rally for over a month to peak at $69.63 per barrel on March 11 because of supply squeeze by the oil producers’ cartel, the Organisation of the Petroleum Exporting Countries and its allies, including Russia (together known as OPEC+). Its latest rate, before the weekend’s close, was around $64 a barrel.

The cartel resorted to cut about one-tenth of global output in April 2020 after Brent crude plunged below $20 per barrel due to weak demand because of lockdowns in global economies. Also, Saudi Arabia cut additional output by 1 million barrels per day since February this year. The cartel is reluctant to raise output matching the spurt in demand.

An official working with a state-run refiner said on condition of anonymity that public sector oil marketing companies (OMCs) will be asked to absorb some price volatility to keep petrol, diesel and cooking gas prices stable since the firms have made decent profits this year.

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