Petrol hiked by Rs2.35 plus taxes; diesel up 50 paise

India's state-run oil marketing companies have hiked petrol prices by a steep Rs2.35 per litre from Sunday, the sixth increase in rates in three months, and diesel by 50 paise per litre, owing to the plummeting rupee and firming international oil prices.

The increase in rates, which became effective Saturday midnight, is excluding local sales tax or VAT, Indian Oil Corp, the nation's largest fuel retailer, announced. The actual hike for consumers will be greater, and will vary from state to state.

The petrol price in Delhi is up by Rs2.83 to Rs74.10 per litre, while in tax-heavy Mumbai and Maharashtra, it now costs Rs81.57 per litre as against Rs78.61 previously.

This is the sixth increase in rates since June and petrol prices have gone up by a massive Rs9.17 per litre, excluding VAT, in this period.

In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses.

The diesel price in Delhi has been hiked by 57 paise to Rs51.97 per litre while it now costs Rs58.86, up from Rs58.23.

Today's hike in the eighth since 17 January and most of the losses on diesel sales should have been wiped off by now to make the fuel market-priced.

But the fall in the rupee, around 25 per cent since April, has worsened the situation and oil firms are losing Rs12.12 per litre despite prices being raised by a cumulative Rs4.75 this year.