India cuts gasoline prices, may help ease inflation

NEW DELHI, Nov 16 (Reuters): Indian state oil refiners will cut gasoline prices by about 3.2 per cent from Wednesday, the first reduction in three years as well as since pricing controls ended 18 months ago, in a move that could help to ease inflation now near double digits. Gasoline prices will be 1.85 rupees a litre lower, excluding local taxes that vary regionally, and oil firm will now revise prices and pass on changes to customers fortnightly. The fuel will now cost 2.22 rupees cheaper at 66.42 rupeeslt in Delhi. The cut in prices comes after the government faced criticism when state firms-Indian Oil Corp, Bharat Petroleum (BPCL) and Hindustan Petroleum-raised gasoline prices earlier this month, the sixth major rise since June 2010. The price cut, implemented ahead of the next parliament session, could help improve the image of the ruling Congress party, with elections next year in Uttar Pradesh, a key state. But oil firms said there had been no pressure to cut prices. "The reduction has been possible as a result of favourable impact of the slide down both in the international prices of gasoline and in the RupeeDollar parity," oil companies said in a statement. Spot Singapore gasoline prices Tuesday eased to about 109.30 a barrel. The rupeedollar exchange rate came down marginally and was almost stable at around 49.30 rupees to a dollar in the first fortnight of this month, the basis for the current reduction. "If the rupeedollar parity remains at this level or moves further away, its impact would get reflected in the next pricing cycle," the statement said, referring to a falling rupee. The Indian rupee has been Asia's worst performing currency this year and continued to trade at its lowest level in nearly 32 months at 50.6768 per dollar.