IOC seeks Rs 5.18/lt hike in diesel tag

Indian Oil Corporation (IOC) is seeking a Rs 5.18 per litre hike in the price of diesel and Rs 4.70 per litre increase in petrol price, largely due to the surge in international crude oil price.

The surge in crude oil price necessitates a Rs 4 per litre increase in diesel and Rs 2 in petrol, IOC chairman S Behuria said.

"The increase in excise duty on the two products warrants a Rs 1.06 per litre rise in diesel and Rs 2.20 per litre hike in petrol price," he added.

In addition, the supply of ultra-low sulphur content petrol and diesel calls for 34 paise per litre rise in diesel and 30 paise per litre hike in petrol prices, Behuria added.

IOC, Behuria said, is expected to lose Rs 300 crore on petrol and diesel sales in the first fortnight of April because of unchanged prices. In addition, the oil major will lose Rs 350 crore during the same period on selling LPG and kerosene below cost.

The union cabinet is expected to meet on Friday to decide on the possible hike in petroleum prices. The petroleum ministry has already submitted a note on the issue.

 Petrol and diesel prices have not been changed since November 2004 leading to huge revenue loss to public sector oil firms that are being forced to sell fuel at below cost price.

The Indian basket of crude oil has scaled to an all-time high of $53 per barrel.