Petroleum Minister S. Jaipal Reddy said on Tuesday that if global crude oil prices continue to slip further, petrol price would be lowered.
"If the prices globally come down sharply and in a stable way, naturally the prices of petrol would be adjusted downwards," Reddy said.
Petrol prices have been de-regulated and now oil-marketing companies price the fuel on the retail level according to global movement of crude. This has led to sharp increases in the petrol prices.
Other fuels like diesel, kerosene and cooking gas are still under government control. The petroleum ministry had hiked prices of fuel in June as global crude oil prices shot up.
Following Standard and Poor's downgrade of US's sovereign debt rating and fears of the US seeing a double-dip recession, oil prices have witnessed a sharp decline.
Crude was trading around the $80 a barrel mark at the Multi-Commodity Exchange Tuesday afternoon.
A dip in prices of fuel will also have a sobering effect on high inflation, which has been troubling policymaker for over two years.