Monday, 23 July 2012

Petrol price hiked by 70 paise per litre, could be raised again

State oil firms have raised petrol rates by Rs 0.70 per litre from Tuesday as international crude oil prices have breached the $100 a barrel mark once again after a gap of 45 days and rupee is still week against dollar. 

Indian Oil Corp (IOC), India's biggest fuel retailer by volume, said in a statement that the hike was partial and it could be raised again depending on volatility of international oil prices and exchange rates. 

At present IOC is incurring losses of about Rs 1.41 per litre on petrol, the company said. "However, as the price movement is quite volatile, it has been decided that an increase of Rs 0.70 per litre (excluding state levies) may be effected at this juncture and the situation watched for some time depending upon which a further view will be taken at an appropriate time," the statement said. 

The oil ministry officials said this was politically opportune time for oil companies to raise petrol prices because the crucial Presidential poll was over. "They could not raise prices close to the Monsoon session of the Parliament, starting on Aug 8," an official said requesting anonymity. 

"Petrol price hike is expected to attract political uproar and the government could be forced to defer its plan of raising prices of diesel, kerosene and cooking gas," the official added. The government controls retail prices of diesel, kerosene and cooking gas. 

Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) are theoretically free to charge market rates for petrol and often revise its rate fortnightly. But in practice, they need tacit approval of the oil ministry to charge pump rates of petrol. They last increased its price by Rs 7.50 a litre in May, which had invited wrath of the opposition and some of key allies of the UPA government such as the Trinamool Congress. 

Executives of oil companies said they would not follow any predictable timetable to revise petrol rates as prior knowledge affected supply of the fuel. "We will revise its price as and when it is sustainable," chairman of a state oil firm said. 

Companies said the current price increase would vary between 0.70 paise and 0.91 paise in different cities depending on local levies.


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