Oil companies hike petrol prices by Rs1.63 a litre

State-run oil marketing companies have raised the prices of petrol by Rs1.63 (excluding VAT) effective midnight of 13-14 September 2013.

This is the seventh time the oil marketing companies are increasing petrol prices since June.

Announcing the hike on Thursday, Indian Oil Corporation, the largest of the three state-run fuel marketing companies, said oil companies have been forced to raise petrol prices due to rising prices of crude oil and the depreciation of the rupee's value.

"To give effect to these twin reasons, the corporation is required to increase petrol prices by Rs1.63 (excluding VAT) with effect from midnight of September 13-14," IOC said in a release.

The appreciation in the rupee during the past one week "will be passed on to consumers in the next fortnight," IOC said.

Oil firms had raised petrol prices by 75 paise, excluding VAT, on 1 June and followed it with increases of Rs2 per litre on 16 June, Rs1.82 on 29 June, Rs1.55 on 15 July, Rs0.70 on 1 August and Rs2.35 on 1September.

''During first fortnight of September 2013, average international prices of crude petroleum oil have gone up from $114.44 per barrel to $117.40/bbl. The average rupee-dollar exchange rate, however, has deteriorated further from Rs63.88/$ to Rs66.02/$. To give effect to these twin reasons, the Corporation is required to increase petrol prices by Rs1.63 (excluding VAT) w.e.f. midnight of 13th-14th September 2013'' Indian Oil Corp said in its release.

IOC further said any improvement in the rupee's value and stabilisation in oil prices will reflect in fuel prices and any beneficial effects of such developments will be passed on to consumers.

On the prices of regulated products such as diesel, LPG and kerosene, IOC said at current levels, it is losing Rs14.50 per every litre of diesel (HSD), Rs470.50 on each cylinder of LPG and Rs36.83 per lire of kerosene (for PDS sale).

For the year 2013-14, Indian Oil Corporation expects its under-recoveries to touch Rs82,000 crore on sale of three sensitive products. The three state-run oil marketing companies together are expected to report under recoveries of Rs1,56,000 crore.

Oil companies are expected to announce a one-time hike in diesel prices by Rs3-5 per litre, Rs2 on kerosene and Rs50 per cylinder of LPG as the oil ministry looks to cut its subsidy bill.