Oil marketing companies are mulling a Rs.1.50 a litre hike in the price of petrol, the fourth this year, thanks to a falling rupee that has increased the cost of imported crude oil. And the high rates of levies on petrol will mean an effective hike of over Rs.1.80 per litre.
It was in September this year that the State-owned oil marketing companies (OMCs) — Indian Oil, Bharat Petroleum and Hindustan Petroleum — increased petrol price by Rs.3.14 a litre (including taxes) when the rupee was trading at around 48 against a U.S. dollar. However, in recent weeks, the rupee has further depreciated to 49 a dollar, putting exchange rate pressure on import of crude oil.
“From today, there are some losses on petrol. To cover them, we may have to increase prices. The loss on petrol at present is Rs.1.50 per litre… After including local levies, the desired increase in retail prices would be Rs.1.82 per litre [in Delhi],” HPCL Director (Finance) B. Mukherjee told journalists here. He, however, did not give any date for the proposed hike. “We are in consultations,” he said. In the international market, crude oil price is hovering around $108 a barrel, while the price of the India basket is $106.65 a barrel as on October 31, 2011. Since the government deregulated petrol price in June 2010, the OMCs “informally” seek clearance from the Centre before announcing a hike.
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In May this year, when the OMCs went for a Rs.5 a litre hike (the highest in recent years), it had sought an increase of Rs.10.50 to meet its under-recoveries.
The OMCs have raised petrol price thrice in 2011 – in January by Rs.2.50 a litre (against the desired hike of Rs. 3.72), in May and in September. Earlier, in December 2010, petrol price was increased by Rs.2.96 a litre against the desired hike of Rs. 4.90. Today, the per litre petrol price in Delhi is Rs.66.84 which could go up to Rs.68.66 post hike. The increase will be slightly more in Chennai, Mumbai and Kolkata due to the higher State taxes. Petrol price in these three metros today is Rs.70.82, Rs.71.92 and Rs.71.28 respectively.