The UPA-II, celebrating three years in office, gave the “common man” a gift on Wednesday: the steepest- ever increase of Rs. 7.54 in petrol prices. The increase is the first in the past six months.
Petrol price in Delhi was increased by Rs. 7.54 a litre to Rs. 73.18 with effect from midnight Wednesday, the state-owned oil marketing companies said in separate, but identical, statements.
However, the rates of diesel, LPG and kerosene, raised in June last year, have been left untouched. But officials said the government would soon have a look at them as they also needed an increase to save the oil marketing companies from going bankrupt.
The previous steepest increase in petrol prices was Rs.5. The oil marketing companies had twice raised the prices by Rs. 5 — on May 15, 2011, when the rate in Delhi was increased from Rs. 58.37 to Rs. 63.37; and on May 24, 2008, when it was jacked up to Rs. 50.56. The increase comes after a 14.5 per cent rise in crude oil prices and a 3.2 per cent fall in the value of the rupee.
With Thursday's increase, petrol will cost Rs. 78.57 a litre in Mumbai, against Rs. 70.66. In Kolkata, the rate will go up by Rs. 7.85 to Rs. 77.88. In Chennai, it will be Rs. 77.53, up by Rs. 7.98.
Interestingly, on Tuesday, Petroleum and Natural Gas Minister Jaipal Reddy hinted at a price increase, arguing that the rupee depreciation had badly affected the oil companies.
The oil marketing companies, which had lost Rs. 4,860 crore on petrol sales in the fiscal to March 31 this year, are now losing Rs. 6.28 on a litre of petrol. Factoring in the 20 per cent value-added tax, the desired increase in Delhi comes to Rs. 7.54. The companies are losing Rs. 512 crore a day on the sales of diesel, domestic LPG and kerosene. Diesel is now sold at a loss of Rs. 15.35 a litre, kerosene at Rs. 32.98 a litre and a 14.2-kg domestic LPG cylinder at Rs. 479.
The companies had together lost Rs. 138,541 crore in revenue during 2011-12. This year, the loss is projected to be Rs. 193,880 crore. During 2011-12, petrol prices were revised five times in order to bring domestic prices in line with those in the international market. The rates were increased on three occasions and lowered on two. During the last revision, on December 1, the rate was brought down to Rs. 65. 64, by Rs.0.78.
