Petrol price to be hiked by Rs 2 this week

New Delhi: A hike of about Rs 2 per litre in petrol prices is on cards this week following international crude oil prices touching $90 per barrel mark.

"We would have raised petrol price yesterday (Monday). We had the Oil Ministry consent to hike prices by Rs 1.90-1.95 per litre immediately after the winter session of Parliament ended yesterday, but at the last moment we are asked to wait for one or two more days," an official of IndianOil (IOC), the nation's largest fuel retailer, said.

IOC and other state retailers Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) are losing Rs 4.17 per litre on selling petrol as raw material (crude oil) cost has climbed to $90 per barrel.

A similar hike in diesel rates is likely to be considered by an Empowered Group of Ministers headed by Pranab Mukherjee on December 22.

The basket of crude oil India buys was at $89.34 per barrel on Monday.

It has averaged $88.47 per barrel in December as against about $79 a barrel at the time of last hike in petrol price on November 9.

"International prices are on the rise leading to widening of gap between domestic retail price and their cost of production," he said, adding the oil firms were pushing for about Rs 2.50 per litre hike in prices while the political leadership is willing to concede only Rs 0.95-1.05 a litre.

Even though petrol price was freed from the government control in June, state-run retailers informally consult the oil ministry before revising domestic rates.

They had on November 9 raised petrol price by Rs 0.32 per litre to Rs 52.91 a litre in Delhi even through the desired increase was about Rs 1.1 per litre.

Since June 26, when petrol price was deregulated, IOC, BPCL and HPCL have revised rates only four times even though the crude oil has jumped from $73-74 per barrel at that time to $90 a barrel currently, the official said. On diesel, the three firms are losing about Rs 5 a litre.

A fuel price hike was planned after the winter session of Parliament ended on December 13. The last hike in petrol price on November 9 had happened just before the winter session of Parliament began.

If prices are not revised, IOC, BPCL and HPCL are likely to end the fiscal with close to Rs 67,000 crore revenue loss on sale of diesel, domestic LPG and kerosene below cost.

The oil retailers lose Rs 272.19 on the sale of every 14.2-kg LPG cylinder and Rs 17.72 per litre of kerosene.