India Oil Companies Hike Petrol, Diesel Prices by 90 Paise

Public sector oil companies increased petrol and diesel prices by nearly 90 paise per litre on Saturday, the third hike since May 15, as they sought to partly offset mounting losses from selling fuels below market rates amid a sharp rise in global crude prices due to supply concerns. But that still leaves them with an under-recovery of 13 on every litre of petrol sold by them and 38 a litre on diesel (both pre-tax) as global prices remain above the $100 a barrel mark. With this, the cumulative increase has reached just under 5 a litre, still lower than hikes seen in many other parts of the world since the war in West Asia triggered a spike in oil prices. While petrol now costs 99.51 per litre in Delhi, diesel is priced at 92.49. With global gas prices also on the boil, Indraprastha Gas has also announced a fresh Re 1 increase in the price of CNG, taking it to 81.09 per kg in the capital, a second hike in this week. Prices in neighbouring cities of Noida, Ghaziabad and Gurgaon have also gone up. Prices of domestic LPG cylinders and piped cooking gas, however, have remained unchanged. After the first hike, govt said the cumulative under-recovery on petrol, diesel and LPG had reduced by 25% from 1,000 crore to 750 crore. A litre of petrol in Mumbai now costs 108.49, while diesel is priced at 95.02. In Chennai, petrol costs 105.31 per litre and diesel 96.98, while in Kolkata, petrol costs 110.64 per litre and diesel 97.02. Retail petrol and diesel prices are linked to global crude prices, which have risen by over 50% since the war began on Feb 28, disrupting flows through the Strait of Hormuz. The variation in auto fuel prices across states is due to differences in value added tax (VAT) structures. After keeping petrol and diesel prices unchanged for 75 days despite the rise in crude, oil companies raised prices first on May 15 with a hike of about 3 per litre, followed by another 90 paise increase on May 19. Govt officials said the Centre had initially taken a significant hit on revenues to shield consumers, even as fuel prices across the world rose between 10% and 90%. It added that petrol prices in most major developed economies are now above 150 a litre, with several countries retailing it at over 180. An official said most major importing economies had passed on the burden to consumers, with pump prices in several countries doubling over the last 48 months.