Nov. 16 (Bloomberg) -- Indian Oil Corp., the nation’s biggest refiner, dropped to the lowest in more than two years in Mumbai trading after state refiners cut gasoline prices for the first time since January 2009.
Indian Oil fell 2.8 percent to 267.90 rupees at the close, the lowest level since Aug. 3, 2009. Bharat Petroleum Corp., the second-biggest state-refiner, dropped 4.2 percent and Hindustan Petroleum Corp. lost 5.1 percent.
Refiners reduced gasoline prices by 2.22 rupees a liter in New Delhi starting at midnight, S. Varadarajan, finance director at Bharat Petroleum, said yesterday by telephone. Gasoline now costs 66.42 rupees ($1.31) a liter in the capital.
Refiners have room to cut gasoline prices after overseas rates of the fuel declined, according to a release by Indian Oil. Gasoline prices were raised three times in the past six months as the refiners sought to cut losses from selling fuels below cost. The latest increase on Nov. 4 was criticized by the main opposition Bharatiya Janata Party and allies of Prime Minister Manmohan Singh’s government.
“Fuel pricing in India is always more of a political decision rather than an economic one,” said Kamlesh Kotak, vice president of research at Asian Markets Securities Pvt. in Mumbai. “Parliament starts next week and the government wants to give out a positive picture.”
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