Petrol price hiked, again
New Delhi   16-Sep-2011

For the second time in four months, petrol has become costlier. The public sector oil marketing companies (OMCs) have increased the fuel price by over Rs 3 a litre from Friday.

With this hike, petrol in Delhi, inclusive of all levies, will cost Rs 3.14 a litre more, taking the retail price to Rs 66.84 a litre. Petrol prices vary from city to city depending on VAT and other local levies.

The oil retailers were compelled to raise the prices as the cost of importing crude oil increased with the rupee touching a two-year low against the dollar. The rupee has weakened by almost four per cent in the last 15 days from Rs 46.02 to Rs 47.84 versus the dollar.

In a statement IndianOil said, “The factors resulting in the revision of the petrol price are increase in the international price (FOB) of petrol and devaluation of rupee.” The FOB price for petrol was $119.41 a barrel the last fortnight, which has gone up to $125.18/barrel. These factors have resulted in increase of under-recovery on petrol to Rs 2.61 a litre from Rs.0.41 a litre on September 1. In the price increase of Rs. 3.14/litre for Delhi, the impact due to exchange rate is 48 paise and due to increase in International prices Rs. 1.72. The balance impact of Rs. 0.53 is due to VAT.

The three public sector retailers — IOC, Bharat Petroleum and Hindustan Petroleum — have lost Rs 2,427 crore (till September 15) on petrol. Had the price not been revised, their losses would have been Rs 15 crore daily. This is despite the companies having the freedom to decide on petrol prices.

Meet on LPG

A ministerial panel, headed by the Finance Minister, Mr Pranab Mukherjee, is expected to meet on Friday, to consider capping the number of LPG cylinders that the domestic consumer can buy at the subsidised prices. This is in line with interim report of the Nandan Nilekani Task Force on Direct Transfer of Subsidies on Kerosene, LPG and Fertiliser. The empowered group of ministers in its last meeting held in August had in-principle accepted the interim report.