Indian state fuel retailers to cut petrol, diesel prices as election nears

A man opens a valve of a fuel tanker during the refilling of an underground fuel tank, after a petrol pump ran out of fuel after shortages in Mumbai

By Nidhi Verma

NEW DELHI (Reuters) -Indian state fuel retailers will cut petrol and diesel prices from Friday, the first change in about two years, ahead of the expected announcement of a date for national elections.

The retail price of a litre of petrol and diesel will both fall by 2 rupees ($0.0241) in Delhi to 94.72 rupees and 87.62 rupees respectively, the petroleum ministry said in a post on social media platform X.

The new prices will be effective from 6 a.m. local time on Friday, the ministry said, adding the lower prices would also help control inflation and increase consumer confidence and spending.

Opinion polls predict an easy victory for Prime Minister Narendra Modi's Hindu nationalist Bharatiya Janata Party and its allies in the vote for members of the lower house of parliament.

"Reduction in petrol and diesel prices will boost consumer spending and reduce operating costs for over 5.8 million heavy goods vehicles running on diesel, 60 million cars and 270 million two-wheelers," the ministry said.

The price reductions will vary from city to city due to local taxes.

India's annual retail inflation in February rose at a faster than expected pace due to elevated food prices.

Annual retail inflation dipped to 5.09% in February from 5.10% in January, but was higher than the 5.02% forecast in a Reuters poll of 42 economists.

Earlier this month, India decided to cut the cost of a cooking gas cylinder by 100 rupees, in a move seen as targeting female voters.

(Reporting by Tanvi Mehta and Nidhi VermaEditing by Mark Potter)