Against all expectations? and logic, at first sight, the price of petrol has dropped by 10%. While many had thought fuel would be subject to a major rise of 20%, the Automatic Pricing Mechanism (APM) committee that met on Sunday took the opposite decision. A litre of petrol will now cost Rs 31.30 instead of Rs 34.80. However, estimates have not been wrong as regards diesel: its price has gone up by 20% reaching Rs 28.20 a litre against Rs 23.75 before.

While many motorists were queuing at filling stations on Sunday to make sure they would fill their tanks before the increase, the APM committee was realising that no increase would be necessary this time for petrol. Petrol consumption having been 70% higher than planned between the 15th December and 15th March, it had allowed the State Trading Corporation (STC) to lower its deficit to Rs 12 million ? compared to Rs 635 million a few months ago.

But this is not the only reason: CSO director Harish Bundhoo explained that the decrease was due to a stabilisation of oil prices as well as of the dollar exchange rate. However, the deficit on diesel has reached Rs 452 million that couln?t be lowered without a major increase.

Even though this rise appears weird ? the price of petrol may have remained stable but it has not gone down on the world market ? no doubt petrol consumers are delighted with the good news!