Effecting the seventh hike in three months, oil marketing companies increased petrol prices by Rs 1.63 per litre, making the transport fuel dearer by around Rs 11 since June, sans local taxes.
After the hike, petrol price in Bangalore will will go up by Rs 2.14 to Rs 83.35 per litre, by Rs 1.96 to Rs 76.06 in Delhi, and to Rs 83.63 against the current Rs 81.57 in Mumbai.
The increase will be effective from Friday-Saturday midnight. It excludes local sales tax or VAT, which varies from state to state.
The latest increase is quite contrary to the expectations that the rate of petrol would come down in the wake of cooling global crude prices and an appreciation in the rupee. Although the hike was due on the September 16, the OMCs advanced the date and announced the increase after factoring in the rupee's depreciation in the early part of the month.
India’s largest fuel retailer, the Indian Oil Corporation (IOC), however, said that the appreciation in the value of rupee and cooling of crude prices would be passed on to the consumers in the next fortnight.
The IOC said average international prices of petrol have gone up to $117.40 a barrel from $114.44, while the average exchange rate has deteriorated to Rs 66.02 a dollar in September from Rs 63.88 a dollar in the second half of August.
“To give effect to these twin reasons, the corporation is required to increase petrol prices by Rs 1.63 (excluding VAT) with effect from midnight of September 13-14,” it said. There may be a one-time hike of Rs 3-5 per litre in diesel prices soon, as the indications have already come from the petroleum ministry, which looks to cut the Rs 1.8 lakh crore losses in the current year.
A rise in kerosene oil prices by Rs 2 a litre and LPG by Rs 50 per cylinder is also possible in coming weeks. Oil firms are also losing Rs 36.83 per litre on kerosene and Rs 470.50 per cylinder on LPG.