Oil companies may increase petrol prices by up to Rs 1

Few days back, the government of India had taken a positive step by reducing the petrol prices, but it seems like it will no longer sustain. It is expected that the petrol prices may be increased by up to Re 1 per litre this week, as the rupee against dollar has hit a 10-month low, which ultimately turned the import of oil costlier. The government has deregulated the petrol and diesel prices, and now the oil marketing companies are revising the petrol prices according to the International market. Petrol price revision is likely to be held today, and if the decision is approved by the oil ministry, then the increased prices will come into effect from June 1.

However, the international prices for oil have softened, the Indian Rupee value has come down to Rs. 56.38 against the US dollar, which is approximately Rs. 2 lower than the rate in the March. Since March, this will be the first hike in three months' time. Petrol prices were hiked by Rs. 1 in March 2013, and in past three months the petrol prices were cut down four times due to softening oil prices in global market.

The oil marketing companies had reduced the petrol prices by Rs. 3 per litre on May 1, Rs. 1.20 per litre on April 16, Re. 1 on April 1 and Rs. 2.40 on March 16. Currently, the petrol prices in our national capital is Rs. 63.09 per litre. Before the reduction in rupee value against dollar, the loss on diesel was Rs. 3.78 per litre, now after the depreciation, the loss on diesel sales has increased to about Rs. 5 per litre. If the current situation continues, we could see a regular hike in diesel prices for next 9-10 months. The next revision on diesel prices (40-50 paisa) would be done by 16th June. We already know that the government of India had allowed OMCs to increase diesel prices in small numbers of 40-50 paisa per litre every month till all the losses on the fuel prices are wiped out.