RIL hikes diesel prices by Rs 2/litre

In the wake of high international crude price, Reliance Industries (RIL) has raised the price of diesel by Rs 2 a litre. The net effect of the prices would vary between Rs 2.36 a litre and Rs 2.97 a litre depending on the region, owing to different tax rates. RIL had increased the price of petrol by Rs 2.52- 2.92 a litre 10 days ago.

The announcement of diesel price hike came when the Centre is mulling raising the fuel prices to combat the impact of surging global price.

Confirming the diesel price hike, RIL sources said the company was getting neither concession on crude nor oil bonds to cut its losses.

"RIL is buying crude from the competitive international market, while the public sector companies are buying it in reduced rate. Oil bonds are also limited to PSU firms," they added.

Public sector oil firms are losing about Rs 9.33 a litre on petrol, Rs 10.43 a litre on diesel, Rs 17.16 a litre in kerosene and Rs 114.45 an LPG cylinder, making operations unsustainable. The hike would help Reliance cut losses on retail sales. The company claimed it had lost Rs 1,100 crore last financial year on selling fuel below the cost price.

Reliance has 1,200 petrol pumps across the country and has already captured 5.5 per cent of market share in petrol sales and 12.5 per cent in diesel sales.