Fuel prices may go down again: Deora

India cut gasoline prices by 10 per cent and diesel by 6 per cent in the first week of December,when it also announced other measures to lift wobbly markets in a slowing economy.

The likely cut in fuel prices,ahead of general elections due by May,will further reduce inflation,which has already fallen to a near 10-month low of 6.6 per cent.

Analysts say low inflation may fuel further cuts in central bank interest rates to help India’s $1 trillion economy,which is expected to grow about 7 per cent in 2008/09,slowing from a blistering 9 per cent in each of the previous three years.