The domestic consumer of diesel and petrol must have heaved a sigh of relief over the oil companies not announcing any price-hike of the two auto fuels on the due date of January 1. But their joy could be short-lived - a price-increase may be coming any day now.
That the hike in the retail prices of petrol and diesel has become inevitable is obvious from the fact that international prices of crude have jumped by more than $4 a barrel since the prices were revised last.
Back of envelop calculations indicate that this spurt in international price of crude should result in domestic price of petrol going up by at least Rs 2.40 a litre, and that of diesel by Rs 1.80 a litre.
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However, this is all subject to the tacit approval of the government. It is unlikely that the government will allow domestic oil companies to completely align retail prices of these two auto fuels with import parity prices.
In all probability, the government will ask oil companies either to effect the price hike in phases, or advise them to wait till the international oil market cools down to a level which could obviate the need for a hefty price-hike.
Thanks to the war clouds once again appearing over West Asia and the strike in the oil sector of Venezuela, the international oil market is witnessing an unprecedented spurt. Benchmark Brent prices, which were hovering around $25.87 a barrel a month ago, have jumped to $30.38 a barrel.
The same is true for the Indian basket of crude oil. Prices moved up from $24.58 a barrel on November 28 to $28.42 a barrel on December 31, 2002.
The past week witnessed crude oil prices touching the year