Petrol prices may be hiked Rs0.65 a litre from Friday

A petrol price increase of Rs0.65 per litre may be expected from Friday, if state-owned oil firms manage to get political approval for raising the price.

While the falling rupee, down to an all-time low of Rs53.75 per US dollar has pushed up the cost of oil imports, state-run oil marketing companies say the international rates of gasoline, against which domestic petrol prices are benchmarked have also gone up. (See: Rupee's plunge hits new record low of 53.75 against dollar) http://www.domain-b.com/economy/general/20111214_rupee_plunge.html

The under-recovery for state-run oil marketing companies on petrol at current international prices is around Rs0.56 per litre, which rises in Neww Delhi to Rs0.65 after adding local sales tax, which they are keen to recover. PTI reported oil companies would review prices tomorrow and any change would come into effect from 16 December.
 
State-owned oil firms have cut petrol prices twice in the past one month following the easing of international oil rates.

The companies cut petrol prices by Rs2.22 per litre, or 3.2 per cent, from 16 November following this up with another Rs0.78 per litre cut from 1 December.

The news agency said it remains to be confirmed if oil companies would go ahead with hiking prices from tomorrow midnight, in line with the practice of changing rates every fortnight, or the companies would tolerate the under recovery for another fortnight.

Public sector oil firms, which revise the prices of the fuel every month on the 1st and 16th, based on the average international rates of the previous fortnight, may informally consult the parent petroleum ministry prior to taking a decision.

According to analysts, the government may be reluctant to let the oil companies go ahead with their demand considering that parliament is in session, and an increase in prices might trigger portests.

Gasoline prices have averaged $111.11 per barrel in Singapore this month, up from $108.25 a barrel in the previous fortnight.