Fuel Prices Hiked Again; Petrol Rs 1.50 per litre, Diesel 45 paise

State-owned oil companies that currently have the pricing freedom has hiked the prices of petrol and diesel by Rs 1.50 per litre and 45 paise per litre respectively, that came into effect from yester after midnight. It is the first hike in petrol prices in last three and a half months and the second rise in diesel prices within a month time, which includes local sales tax or VAT, so the fuel would cost even higher to the consumers after the taxes are added.

Petrol prices in Delhi will go up by Rs 1.80 to Rs 69.06 per litre after adding 19 per cent vat charged by the state; so as the diesel rates, it would go up by 51 paise to Rs 48.16 per litre. As Oil marketing companies had stated that the diesel prices would go up by 50 paise per litre every month till all the losses on diesel are completely recovered. We have already witnessed petrol revision for 27 times ever since it was decontrolled in mid 2010, so the same is now likely to happen with the diesel as well.

India’s largest fuel retailer, Indian Oil Corporation announced a hike of Rs 1.50 per litre in petrol price as oil prices are said to have risen 7.5 per cent internationally. As per the oil companies, even after this hike, oil firms would continue to bear the loss of Rs 10.27 a litre on diesel as cost of crude has risen by 4 per cent to USD 113.24 per barrel. Fuel prices will differ by a few paise on the fuel stations owned by HPCL and BPCL.

Commenting on the same IOC said that the State-owned companies have been "compelled to pass on the increase in petrol prices to consumers as the they have already suffered losses on sale of petrol so far and trends in international oil market as well as rupee-US dollar exchange rate indicate continued strength."

"The trends of international oil prices and INR-USD exchange rate shall be closely monitored and the same shall be reflected in future price changes," IOC added.
"However, since the last price revision, international diesel prices have also shown continued uptrend. As a result, under-recovery (loss) has gone up to Rs 10.72 per litre which now, with current upward revision of HSD prices by Rs 0.45 per litre, shall stand reduced to Rs 10.27," the statement added. 

Except the loss on sales of diesel, state-owned companies are losing Rs 31.60 a litre on kerosene and Rs 481 per cylinder (14.2 kg) of LPG. "Projected under-recovery of IOC on three sensitive products is expected to cross Rs 86,000 crore and of the industry (IOC plus BPCL and HPCL) beyond Rs 1,63,000 crore during current year," it added.