Steep hike in petrol price, diesel up too

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The state-owned oil marketing companies on Saturday hiked petrol prices by `2.35 per litre (excluding state levies), and retail diesel prices by 50 paise per litre (excluding local taxes) as the depreciation of the Indian rupee made fuel imports costlier.
There could be more pain ahead for consumers as the government could steeply increase the prices of diesel and even domestic LPG after the Parliament session comes to an end next week to cut losses on their sale.
Oil minister M. Veerappa Moily has in a letter to Prime Minister Manmohan Singh warned that if the present position continues, under-recoveries on the sale of petroleum products could rise to `1,80,000 crores in the current financial year, against `1,61,000 crores in 2012-13.
Petrol prices in Delhi will go up by `2.83 to `74.10 per litre, and diesel prices by 57 paise to `51.97 per litre.
As far as petrol is concerned, this is the sixth increase in prices since June, and in all its price has gone up by `9.17 per litre, excluding VAT.
Petrol prices were last revised upwards by 70 paise per litre (excluding VAT) on August 1. “Consequent to this price increase, the Indian rupee-US dollar exchange rate has deteriorated sharply, from `59.49 per USD to `63.88 per USD in the current pricing cycle, necessitating this price increase,” said the Indian Oil Corporation. Also, it said the geopolitical situation in the Middle East is leading to pressure on international oil prices.
The state oil companies were authorised in January to hike diesel prices by around 50 paise a litre per month till the under-recovery on it gets eliminated.
However, the government could steeply increase diesel prices after the Parliament session ends as the under-recovery on it has sharply risen to over `12.12 per litre.
“ln spite of the decision taken by the government to authorise OMCs to increase the price of diesel in the range of 40-50 paise per litre per month and after seven price increases since 18.01.2013 totalling to `4.25 per litre, the current under-recovery of `10.22 per litre is higher than the level of prevailing under-recovery of 17.01.2013 when it was `9.03 per litre,” said Mr Moily in his letter to the Prime Minister.