Petrol, diesel prices hiked again

This hike is the fourth increase in five days

Petrol in Delhi will now cost ₹98.61 per litre as against ₹97.81 previously. File | Photo Credit: K.V.S GIRI

Petrol and diesel prices were hiked by 80 paise a litre each on Saturday, the fourth increase in five days as oil firms passed on to consumers the spike in cost of raw material.

Petrol in Delhi will now cost ₹98.61 per litre as against ₹97.81 previously while diesel rates have gone up from ₹89.07 per litre to ₹89.87, according to a price notification of state fuel retailers.

All the four increases since the ending of a four-and-half-month-long hiatus in rate revision on March 22, have been of 80 paise a litre. These increase increases are the steepest single-day rise since the daily price revision was started in June 2017.

In four increases, petrol and diesel prices have gone up by ₹3.20 a litre.

Prices had been on a freeze since November 4 ahead of the assembly elections in States like Uttar Pradesh and Punjab— a period during which the cost of raw material (crude oil) soared by about U$30 per barrel.

The rate revision was expected soon after assembly elections ended on March 10 but it was put off.

Oil companies, who did not revise petrol and diesel rates for a record 137 days despite prices of crude oil (raw material for producing fuel) rising to $117 per barrel compared to around $82 in early November, are now passing on to consumers the required increase in stages.

Moody's Investors Services on Thursday stated that state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) together lost around $2.25 billion (₹19,000 crore) in revenue for keeping petrol and diesel prices on hold during the election period.

Oil companies "will need to raise diesel prices by ₹13.1-24.9 per litre and ₹10.6-22.3 a litre on gasoline (petrol) at an underlying crude price of $100-120 per barrel," according to Kotak Institutional Equities.

CRISIL Research said a ₹9-12 per litre increase in retail price will be required for a full pass-through of an average $100 per barrel crude oil and ₹15-20 a litre hike if the average crude oil price rises to $110-120.

India is 85% dependent on imports for meeting its oil needs and so retail rates adjust accordingly to the global movement.