Bangalore: Petrol prices will be hiked once by Rs 3.14/litre effective from Thursday midnight after rupee touched two-year low against the US dollar, increasing the cost of importing crude oil.
IOC, BPCL and HPCL have lost Rs 2,450 crore this fiscal on selling petrol -- whose rates were freed from government control in June last year -- below the cost.
"At current rate, oil firms will accrue another Rs 2,850 crore of loss on sale of petrol, taking the total loss on a fuel that was freed from control, to Rs 5,300 crore for the full fiscal," a top government official said, adding, "Oil firms will have to take a call on raising petrol price soon."
Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) had last raised petrol price by Rs 5 a litre in May. Diesel, domestic LPG and kerosene price were hiked in June by Rs 3 per litre, Rs 50 per cylinder and Rs 2 per litre.
The government had in June last year decontrolled petrol price but continues to dictate diesel, domestic LPG and kerosene rates. However, petrol price has not moved in tandem with its cost, keeping in mind the government's concerns on inflation which climbed to 9.78 percent in August.
The basket of crude oil that India buys had averaged USD 85.09 per barrel in 2010-11. From April-September, it has averaged USD 111.64 per barrel, a 31 per cent increase over the last fiscal (2010-11).
The Indian basket of crude oil averaged USD 106.94 per barrel in August and USD 110.88 a barrel in September.
"Due to hardening of crude/petroleum product prices in the international market and depreciation of rupee viz-a-viz dollar, the under-recoveries of oil marketing companies have been increasing during 2011-12," the official added.
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