Petrol prices up by Rs 1.63 a litre but cut around the corner

September 14, 2013: Motoring just got costlier for the much-harried motorist as state-owned oil marketing companies (OMCs) hiked petrol prices by Rs 1.63 per litre (excluding VAT) at midnight. The hike comes on the back of rising prices of global crude oil.

This is the second hike this month as petrol prices had last been revised upwards on September 1. Since June 1, petrol prices have risen by a whopping Rs 11.54 per litre in Mumbai (see table below).

Following the hike, the fuel will now cost Rs 83.62 in Mumbai, Rs 76.06 in New Delhi, Rs 83.63 in Kolkata and Rs 79.55 in Chennai. According to IndianOil Corporation, the country’s largest OMC, during the first fortnight of September, the average international price of petrol rose from $114.44 to S 117.40 per barrel (bbl). One bbl or barrel is the unit of volume for crude oil and petroleum products and equals 42 US gallons or 35 UK (imperial) gallons, or approximately 159 litres.

However, there could be a price cut this fortnight, giving the slow rise in the value of the rupee. In its statement, IndianOil has said: “Should the recent trend of stabilisation and appreciation of the rupee to US dollar exchange rate continue and international petrol prices also not move adversely, the beneficial effect of the same will be passed on to the consumers in the next fortnight.”

Diesel price hike likely

Diesel is also likely to see a price hike soon, possibly a one-time hike of Rs.3-5 per litre. In a government decision taken in January 2013, it was decided to increase the price of diesel per litre by 40-50 paise till all losses on the fuel are eliminated. At present, OMCs are said to be recording under-recovery of around Rs 14.50 per litre of diesel.

The loss on subsidised fuel sales (total under-recovery) is likely to reach a level of Rs 180,000 crore in 2013-14 as against Rs 161,000 crore in 2012-13.