Another fuel price shock in the offing as OMC losses mount

Petrol prices in India are expected to go up by around Rs3-4 a litre with public sector oil marketing companies reporting an increase in losses on sale of petroleum fuels at subsidided rates. PSU oil firms are currently losing Rs3.56 in the sale of every litre of petrol, besides the mounting losses on the sale of diesel, kerosene and domestic LPG.

An announcement raising the price of petrol is expected in a couple of days. A decision towards this was made at a meeting of the state-run oil marketing companies, a Zee Business report said today.

Meanwhile, a government release today said the under-recovery on high-speed diesel (HSD) has increased to Rs13.76 a litre for the second fortnight of August (beginning 16 August 2012), from Rs12.06 a litre during the previous month.

In case of PDS kerosene and domestic LPG the under-recoveries have gone up to Rs28.54 per litre and Rs231 per cylinder, respectively, for August 2012 from Rs27.20 per litre and Rs319 per cylinder, respectively, during July 2012.

A Rs3 increase in petrol prices would take the price of the fuel in Delhi to Rs71.46 per litre (Rs68.46 at present), in Mumbai to Rs78.14 a litre (Rs75.14), in Kolkota to Rs79.14 per lite (Rs76.14) and in Chennai to Rs75.19 per litre (Rs72.19).

State-owned oil firms had last hiked petrol price by Rs0.70 per litre effective 24 July and since then global prices of crude oil have soared more than $12 per barrel.