Guwahati: Fuel prices in India continue to go up as domestic oil marketing companies have been revising tariffs on petrol and diesel.
Petrol and diesel rates were hiked for the seventh time so far since the ending of a four-and-half-month-long hiatus in rate revision on March 22.
Petrol price has gone up by Rs 4.80-Rs 4.85 per litre and diesel rate has been hiked by Rs 4.85 a litre.
Fuel rates have been increased across the country but prices vary from state to state depending upon the incidence of local taxation.
Why fuel rates are Increasing
Petrol and diesel prices had been on a freeze since November 4 ahead of the assembly elections in states like Uttar Pradesh and Punjab — a period during which the cost of raw material (crude oil) soared by about USD 30 per barrel.
The rate revision was expected soon after the counting of votes on March 10 but it was put off by a couple of weeks.
The increase in retail price warranted by crude oil prices rising during the 137-day hiatus from around USD 82 per barrel to USD 120 is huge but state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are passing on the required increase in stages.
- Moody’s Investors Services last week stated that state retailers together lost around Rs 19,000 crore ($2.25 billion) in revenue for keeping petrol and diesel prices on hold during the election period, according to a news agency.
- Oil companies “will need to raise diesel prices by Rs 13.1 to Rs 24.9 per litre and Rs 10.6 to Rs 22.3 a litre on gasoline (petrol) at an underlying crude price of USD 100-120 per barrel,” Kotak Institutional Equities said.
- CRISIL Research said a Rs 9- Rs 12 per litre increase in retail price will be required for a full pass-through of an average USD 100 per barrel crude oil and Rs 15-20 a litre hike if the average crude oil price rises to USD 110-120.
- India is 85 per cent dependent on imports for meeting its oil needs and so retail rates adjust accordingly to the global movement.