Petrol price hiked by Rs2 excluding state taxes

India's oil marketing companies have hiked the price of petrol by a steep Rs2 a litre (excluding local levies) with effect from Sunday.

The actual price increase for consumers would be higher, varying from state to state depending on local sales tax or VAT.

This is the second increase in petrol prices this month, triggered by the plummeting of the rupee, which has made imports costlier.

Prices of petrol were last revised upwards on 1 June by Rs0.75 a litre (excluding state levies) mainly on account of devaluation of the rupee.

The price of petrol in Mumbai has been increased by Rs2.52 to Rs74.60 a litre while in Delhi it has been hiked by a smaller Rs2.40 a litre to Rs66.39. Prices in Kolkata went up from Rs71.29 to Rs73.79 per litre and in Chennai the prices were up by Rs2.54 to Rs69.39.

However unlike in the last round of hikes, diesel prices have been left unchanged.

"Since the last price change, the slide in the rupee has continued, and the dollar-rupee exchange rate has deteriorated from Rs55.32 to Rs57.08 per US dollar," said IndianOil Corp, the country's biggest oil marketing company, in a release.
International petrol prices have also hardened during this period. "The combined impact of both these factors, mainly depreciation of the rupee, has warranted the increase in petrol prices by Rs2 per litre (excluding VAT)," IOC stated.

The 1 June increase in the petrol price was the first in three months. The previous hike was on 1 March, which was followed by rates being cut four times on falling global oil prices.

Diesel prices have been hiked five times since January, when the government authorised retailers to increase prices by up to 50 paise a litre every month till the entire losses on selling the fuel at a subsidy are wiped out.

The next hike in diesel is likely at the end of this month, as prices were hiked by 50 paise, excluding VAT, on 1 June.

IOC said the devaluation of the rupee has led to widening of losses on selling diesel and cooking gas below cost.

Losses on diesel for the retailers have widened to Rs6.31 a litre from Rs4.87 at the beginning of the month. Besides, oil firms are also losing Rs27.75 per litre on kerosene and Rs335.14 on every subsidised 14.2-kg domestic LPG cylinder.