Brent crude oil was trading at $98.2 a barrel on Friday evening, down from about $119 a month ago. Prospects of weak global demand due to the turmoil in Europe and discouraging employment data in the US has helped crude prices drop about 8% since the beginning of 2012, but Indian petrol prices are 11.5% higher. Petrol prices were raised only last week after a 5-month freeze due to political considerations.
Officials in the government and oil companies say petrol prices will soon be reduced by more than Rs. 2 a litre but its timing will be decided politically. Indian Oil, Hindustan Petroleum and Bharat Petroleum deferred their decision to cut petrol rates from Friday as the move would give “undue credit” to BJP, which had called for a nationwide strike on Thursday against the price hike, officials said.