Oil marketing companies to review prices if crude falls

State-run oil marketing companies today defended the steep hike in petrol prices saying it was intended to offset growing losses caused by discounted sale of petro fuels, including petrol. They also offered to roll back the price hike as and when prices of crude oil in the international market declines.

The 11.5 per cent increase in petrol prices announced yesterday, has triggered protests and a political backlash even from allies of the ruling Congress at the center.

R S Butola, chairman of  Indian Oil Corp (IOC), the country's biggest refiner, said the company may cut petrol prices once global crude prices drop. There won't be any immediate roll-back, he said.

Oil marketing firms review prices twice every month and Butola said the company will review petrol prices next in early June.

State-run oil marketing companies have effected an average Rs7.50 a litre increase in petrol prices effective midnight on Wednesday. While oil marketing companies have raised petrol prices by Rs6.28 per litre, local sales tax or VAT would take it to Rs7.50 a litre in Delhi.

Sales tax / VAT varies from 15 per cent to 33 per cent in the states. Fuel sales will now attract an additional sales tax of Rs0.94 to Rs2.07 per litre over and above the existing sales tax of Rs10.30 per litre to Rs18.74 per litre on petrol prices.