Oil Marketing Companies (OMCs) have slashed petrol and diesel prices across the country by ₹2 per litre. New prices would be effective from March 15, 2024, at 6:00 am.

The price cut comes ahead of the Lok Sabha elections this year as Prime Minister Narendra Modi looks to extend his decade in power with a rare third term.

"Reduction in petrol and diesel prices will boost consumer spending and reduce operating costs for over 58 lakh heavy goods vehicles running on diesel, 6 crore cars and 27 crore two-wheelers," the ministry of petroleum and natural gas says in a post on X.

Reduced petrol and diesel prices will benefit the citizens through more disposable income, boost tourism and travel industries, control inflation, increase consumer confidence and spending, reduce expenses for businesses dependent on transportation, enhance profitability for logistics, manufacturing, and retail sectors and reduce outgo for farmers on tractor operations and pump sets, the ministry says.

Following the price revision, petrol in Delhi will cost ₹95 per litre, down from ₹97 per litre, while prices in Mumbai, Kolkata and Chennai are set to drop to ₹104.21 per litre, ₹103.94 per litre and ₹100.75 per litre, respectively.

May futures of Brent crude – the global oil benchmark – rose 1.7% to $85.48 a barrel after touching an intra-day high of $85.67, its highest since November.

India's state-run oil marketing companies (OMCs) had earlier kept the retail fuel prices unchanged ahead of the general elections in 2024.

High crude oil prices are expected to weaken the profitability of the three government-owned oil marketing companies in India — Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd, according to Moody's.

The three companies will have limited flexibility to pass on higher raw material costs by increasing the retail selling prices of petrol and diesel in the current fiscal year ending on March 31, 2024, Moody’s said in a report last year.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.