The price review is likely to happen on Friday, sources told NDTV Profit.
The sources said that the final quantum of price cut for petrol will be decided after data for Thursday and Friday has been collated. As per Petroleum Ministry data, the Singapore benchmark FOB (freight on board) price of petrol fell to $120.43 a barrel on March 13 from $123.54 a barrel on March 1.
The oil firms will also take into account the rupee-dollar parity before deciding on a price cut for petrol. The Indian currency gained marginally at Rs.54.44 on March 14 from Rs.54.48 on March 1 against the US dollar, according to data from the Reserve Bank of India.
Both the international price of gasoline and a flat currency appreciation gives the oil firms enough leg-room for a price cut of Re.1 or a little more, the sources said.
As far as diesel is concerned, the three oil marketing firms - Indian Oil, Bharat Petroleum and Hindustan Petroleum - are likely to hike prices by 40-50 paisa a litre. Should it happen, it will be the third consecutive price hike for diesel in the last three months.
In January this year, the government allowed the oil firms to raise the price of diesel by 40-50 paisa every month until the companies have wiped out the losses they incur from having to sell diesel at subsidised rates to the public. The oil firms are currently losing Rs.11.26 on the sale of every litre of diesel.
Petrol prices have been hiked 20 times and reduced seven times since the fuel was deregulated in June 2010, in line with international prices.
Unlike petrol, prices of diesel, cooking gas (LPG) and kerosene are not decontrolled, and the government has the ultimate control on pricing. The government subsidises the three products and compensates the oil firms for selling the fuels at lower prices.
For the current financial year ending March 31, 2013, the under-recovery (losses) on the three products is estimated at Rs.1,60,000 crore. The Finance Ministry has assured a compensation of about Rs.55,000 crore for the first three quarters, and has also asked the public sector oil and gas explorer and producers to provide more than 38 per cent of the total under-recoveries to the oil marketing firms.