Petrol prices on Monday were hiked by Rs 1.69 per litre while the price of diesel was increased 50 paise per litre. The revised rates will come into effect from July 1.
The hike is mainly due to the ongoing crisis in Iraq and forex market fluctuations.
“Due to geo-political unrest in the Middle East, there has been significant increase in International Oil prices during the past two weeks,” country’s largest oil firm Indian Oil Corporation (IOC) said while commenting on the increase.
The INR-USD exchange rate has also deteriorated, it added.
The hike excludes local sales tax or VAT and the actual increase will be higher and may vary from city to city. In the national capital, petrol will cost Rs 73.58 per litre, up Rs 2.02 from Rs 71.56, while diesel rates will go up by 56 paise to Rs 57.84 per litre.
Diesel prices were hiked in accordance of the previous government’s order authorising oil marketing companies to increase the retail selling price of Diesel within a small range every month to eliminate subsidy.
According to IOC, even after the increase, under recovery on retail diesel will be Rs 3.40 per litre.
“The movement of prices in international oil market and INR-USD exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes,” it added.
Besides diesel, the state oil firms lose Rs 33.07 a litre on kerosene sold through the public distribution system (PDS) and Rs 449 per 14.2-kg domestic subsidised LPG (cooking gas) cylinder.
IOC has estimated that under-recovery for the industry on sale of petrol, LPG and diesel for the year 2014-15 will be Rs 107,850 crore.
