RIL to hike petrol price by Rs 2/ litre

Reliance Industries (RIL) will increase the price of petrol by Rs 2 a litre from midnight today. The new price comes into effect at over 1,200 retail outlets of RIL across the country.

While adding the local tax of different states, the price increase would be Rs 2.52- 2.92 per litre. Today's price of petrol in Mumbai is Rs 49.16 per litre.

The company has spared diesel from the increase. RIL sells about 2.5 times more fuel per outlet than its public sector competitors.

According to RIL executives, "along with the price hike, the company has upgraded the quality of motor spirit also with a few additives. It will give better mileage and performance to the vehicle."

RIL, the private major in petroleum retail sector, is coming out with premium quality petrol for the first time.

"Owing to the spiralling crude price, RIL is losing close to Rs 450 crore per month on retail sales of petrol and diesel. The company has lost roughly Rs 11 per litre on diesel sales and over Rs 10 on petrol," industry sources said.

RIL's decision to hike the price is in the wake of high crude price in the international market, which is hovering around $70 a barrel.

Recently, the public sector oil marketing majors"" Indian Oil Corporation, Bharath Petroleum Corporation and Hindustan Petroleum Corporation"" in the country had requested to the central government to increase the price of fuels.

Rangarajan committee had also recommended the government to reduce the subsidy to save oil companies from loss. But the government has not taken any decision. Prices of petrol and diesel available at pumps were last revised in September '05.

But retail losses of RIL was less in the past because it had only a minimal retail presence. Now, the company has approvals for setting up 5.849 outlets outlets.