“We are continuing to incur losses by selling petrol below cost prices. We are constantly monitoring the global crude oil price. We will take the decision (to hike the petrol price) at an appropriate time,” IOC Chairman R S Butoal told reporters  here on Monday.

Announcing IOC’s financial results for 2010-11, Butoal said the company is still losing Rs 4.58 per litre on petrol even after the steep hike of Rs 5 per litre from May 15, he said.

From June 1, which will take into account the average international crude oil price of the second fortnight of May, the under-recovery will come down to Rs 1.15 per litre, Butola said.

When asked why the company is not raising the retail price of petrol when it is free to fix the price as per market rate, he said “there is already a steep hike of Rs 5 per litre. Let the market adjust to this hike. We cannot take decision in a mechanical way.”

“Ours is a dynamic economy. If losses again become unbearable we will take the appropriate decision,” Butola said, thereby hinting that the IOC was not in a hurry to hike the petrol price.

Ever since the Centre deregulated the pricing of petrol from June last, the state-owned oil marketing companies (OMCs) have been fixing the petrol price as per market rate. But in the wake of Assembly elections in five states, the petroleum ministry had given “unwritten” instruction to OMCs not to effect any hike in petrol prices despite rise in global crude oil price.

After the ministry instruction, the OMCs withheld any hike even though the global crude oil price had touched a two-half-year high. On May 14 soon after the assembly poll, the OMCs, which were losing nearly Rs 10 per litre on petrol by not aligning with global market rates, effected a hike of Rs 5 per litre of petrol.

While giving its nod to petrol price hike, the ministry was learnt to have directed state-owned OMCs not to pass on the entire burden to consumers at one go and stagger the price hike in phases.

Asked whether the IOC is waiting for “go ahead” signal from the government to effect necessary hike in petrol price, Butola said “we are free to fix the price as per market dynamism.”