No hike in petrol prices in March

Petrol and diesel prices will not be increased in March despite finance minister P Chidambaram increasing excise duty on the two products and levying an additional Rs 0.50 per litre cess for road development.

"The excise duty increase, after factoring in a marginal customs duty cut, warrant a Rs 2.5 per litre increase in petrol prices and Rs 0.65-70 per litre on diesel. But we are not passing on the increase in March," P Sugavanam, director (finance) of Indian Oil Corporation told today.

Besides this increase, the Rs 0.50 per litre additional cess on petrol and diesel will also be passed on to consumers only in April, he said.

For March, public sector oil companies will lose Rs 300 crore on sale of diesel and Rs 150-170 crore on petrol. But the reduction in excise and customs duty to nil on LPG and kerosene would bring a Rs 150 crore benefit to IOC in March.

Sugavanam, however, said the excise and customs duty cut on LPG and kerosene was insufficeint to cover for the losses oil companies were suffering by selling the two mass consumer cooking fuels below the cost.