Oil companies have decided to hike petrol prices by around Rs 3 per litre, effective midnight tonight. According to reports, the decision to raise the price of petrol is because of rupee versus US dollar equation touching a two-year low, resulting in rising costs of importing crude.
State-run oil firms IOC, BPCL and HPCL have reportedly lost Rs.2,450 crores this fiscal on selling petrol - whose rates were freed from government control in June last year - below the cost.
Ministry officials have said that if the price of petrol is not increased, they can expect a loss of a further Rs.2,850 crore.
Besides petrol, the three firms are losing Rs 263 crores per day on selling diesel, domestic LPG and kerosene below cost.
Diesel is being sold at a subsidy of Rs 6.05 a litre, kerosene at Rs 23.25 per litre while domestic LPG rates are under-priced by Rs 267 per 14.2-kg cylinder.
In the first half of the current fiscal, the oil industry has reportedly lost around Rs 65,000 crores on the three products.