News Release Details

Press Release on Hike in Petrol Prices
New Delhi   04-Nov-2011

During current fiscal year, so far, MS domestic selling prices have been revised thrice including the revision w.e.f today i.e. 04.11.11, other two revisions happened w.e.f 15.05.11 & 16.09.11.

The last price change on 16.09.11 was for an amount of Rs 3.14/litre (at Delhi) which eliminated the then prevailing loss of Rs 2.62/litre. However, by this time Indian Oil Corporation had already accumulated a loss of Rs 1134 Crore on sale of MS in domestic market. During Oct’11, there was no price change and the Corporation accumulated another Rs 21 Crore loss on MS sales. Thus, the Corporation has accumulated a loss of Rs 1155 Crore on MS Sales during Apr-Oct11.

Since the last price change wef 16.09.11, international oil prices have softened marginally. While Indian basket of crude has declined from &110.86/bbl to $108.60/bbl, MS FOB Singapore price has gone down from $125.18/bbl to $121.67/bbl. However, the increase in USD-INR exchange rate has been so steep (from 46.29 on 16.09.11 to 49.40 on 01.11.11) that it has more than wiped out the impact of reduced international oil prices.

Based on the trend of crude oil, international MS prices, exchange rate, domestic selling prices & impact of these various factors on loss per unit on domestic sale of MS since the last price change wef 16.09.11 to current period, MS international price (FOB Singapore) has gone down by $3.51/bbl resulting in reduction of Rs 0.97/litre. However, during the said period, the USD-INR exchange rate has shown a significant uptrend of Rs 3.11/USD which had a contrarian negative impact of Rs 2.49/litre on MS prices, resulting in a net negative margin of Rs 1.52/litre on domestic sales of MS. At this rate, OMCs would have suffered additional loss of Rs 130 Crore during 1st Fortnight of Nov’11 had the price increase of Rs 1.80/litre not been effected.

The OMCs monitor international oil prices and exchange rate developments very closely and should the combined effect of these developments result in lower MS prices, they would effect the reduction forthwith in domestic selling prices.