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With the fresh hike, the prices in Delhi would be Rs 70.46 now. Prices were increased last time on February 16 this year. According to an IndianOil Corporation release, the factors that lead to the hike were an increase on international petrol prices from $128.57 per barrel to $131 per barrel since the previous revision. During the time period, the rupee has also depreciated from Rs.53.43 to Rs.54.15 versus dollar.
The company indicated that going by the trend, international prices over the years have shown a spurt during the first quarter of every calendar year.
“They generally start leveling back during the second quarter. Keeping this trend in view, we do believe that there should be opportunities to revise the prices downward as and when the international MS prices soften,” a company statement said.
Apart from loss on sale of petrol, OMCs are also suffering under-recovery on sale of Rs.11.26 per litre on diesel, Rs.33.43 per litre on kerosene and Rs 439 per cylinder for LPG. Projected under-recovery of the Corporation on three sensitive products is expected to cross Rs 86500 crore and of the Industry beyond Rs 163500 crore during current financial year.
In order to reduce the subsidy burden, the Centre had opted for a phase-wise decontrol of diesel from mid January. On a monthly basis, oil marketing companies would be able to raise diesel prices by 45-50 paise. On the other hand, petrol prices were decontrolled in June 2010. Coupling with diesel decontrol, the government had also introduced dual pricing of diesel, which reportedly led to a major chunk of bulk customers shifting to retail platform.
According to the ministry of petroleum and natural gas, OMCs are incurring a daily under recovery of Rs 432 crore, as on March 1. This was Rs 454 crore per day for the previous fortnight on February 16. On February 28, the prices of Indian basket crude stood at $108.44 per barrel.
During the April to December period, the overall under recovery on diesel, kerosene and LPG stood at Rs 1,24,854 crore, while it was Rs 1,38,541 crore during the financial year 2011-12. For the period under review, the under recovery on diesel stood at Rs 73,815 crore, kerosene at Rs 21,891 crore and that of LPG at Rs 29,148 crore.
