Petrol price hiked by Rs1.69 a litre, diesel prices up 50 paise

Oil marketing companies have announced an increase in petrol prices by Rs1.69 per litre and a simultaneous increase in diesel by Rs0.50 per litre as mandated by the government, effective midnight tonight.

The hikes are excluding state levies. Oil marketing companies cited a rise in global oil prices and the fall in rupee for the hike in fuel prices. India imports two-thirds of its oil needs.

Indian Oil in a statement said due to geo-political unrest in the Middle East, there has been significant increase in international oil prices during the past two weeks. "The international prices have increased by more than $4/barrel and the rupee-dollar exchange rate has also deteriorated," it said.

''Due to geo-political unrest in the Middle East, there has been significant increase in international oil prices during the past two weeks. The international prices of MS have increased by more than $ 4/bbl, and the INR-USD exchange rate has also deteriorated. The combined impact of both these factors has warranted an increase in petrol prices by Rs1.69 per litre (excluding state levies),'' IOC said in a release.

In addition, the government has authorised OMCs to increase the retail selling price of diesel within a small range every month until further orders. Even after the current hike of Rs0.50 per litre, under recovery on retail diesel stands at Rs3.40/litre, IOC stated.

Indian Oil said it continues to suffer under-recoveries on sale of kerosene (PDS) of Rs33.07 per litre and LPG (domestic) of Rs 449.00 per cylinder.

For the year 2014-15, IOC expects to incur under-recovery of around Rs56,550 crore on sale of three sensitive products while the industry as a whole will suffer under-recoveries of around Rs1,07,850 crore.