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Petrol price hike likely on cards

The rate change may need a political clearance as Assembly elections in five crucial states

Written by Press Trust Of India | New Delhi | Published: January 1, 2012 2:30:15 am

A hike of about Rs 2.10-2.13 per litre in petrol price is needed because of weakening Indian currency,but oil companies are unlikely to revise rates on Saturday as scheduled and instead may do so on Monday.

State-owned oil companies,as per practice,revise rates of petrol on 1st and 16th of every month based on the average imported price and exchange rate during the fortnight.

As per this schedule,new rates were to be announced today if they were take effect from tomorrow,but top officials at oil companies said the revision is “99 per cent unlikely today”.

The oil companies,they said,will decide on revising rates only on Monday.

The rate change may,however,need a political clearance as Assembly elections in five crucial states,including Uttar Pradesh and Punjab,have been announced.

“While international price of gasoline (against which domestic petrol prices are benchmarked) are more or less at the same level (as at the time of last revision),the rupee has depreciated to about Rs 53 to a US dollar,” an official said.

This warrants an increase of Rs 1.78 per litre and after adding local sales tax or VAT,the desired hike in petrol price in Delhi is Rs 2.10-2.13 a litre.

Petrol at Indian Oil Corp and Bharat Petroleum Corp petrol pumps in Delhi is now priced at Rs 65.64 per litre and at Rs 65.65 a litre on retail outlets of Hindustan Petroleum.

Oil firms had,at the last review on December 15-16,decided not to burden the consumers with about Re 1 per litre hike in petrol price needed at that time,as they felt Reserve Bank of India’s intervention may help arrest fall in rupee’s value. The oil firms had cut petrol prices twice in November.

The companies reduced petrol prices by Rs 2.22 per litre,or 3.2 per cent,from November 16,followed by a Rs 0.78 per litre cut from December 1.

The average exchange rate in first fortnight of December was Rs 51.98 to a US dollar,which has further deteriorated.

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