Facing criticism for increasing the retail price of petrol, government-owned Indian Oil Corporation has said the desired increase was actually Rs 3.72 a litre but it chose to "soften the impact on customer" by increasing the price by only Rs 2.50 a litre.

It said the company was incurring an "under-realisation of Rs 159 crore per day" on the sales of diesel, cooking gas (LPG) and kerosene.

Petrol prices have gone up by about 13 per cent since these were deregulated last June  and about 22 per cent in the current financial year.

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In a statement, the company said even during the previous revision of the price of petrol with effect from December 16, 2010, as against the required increase of Rs 4.90 in the price at New Delhi, the actual increase was confined to Rs 2.96 thus leaving a gap of Rs 1.94, in anticipation of a fall in the price levels in the global oil market.

"However, with the persistent rising trend in the international oil prices, average prices of the Indian crude basket have gone up from $87.83 a barrel during the earlier petrol price revision in December to the current level of $92.31, amounting to an increase of $4.48 a barrel. Average global prices of petrol during the same period have gone through an even higher increase of $5.17 a barrel, rising from a level of $95.30 to $100.47 a barrel."

Based on the current levels in the international oil market, the retail selling prices, inclusive of the tax elements, of diesel, PDS kerosene and LPG should have been higher by Rs 7.65 a litre, Rs 19.60 a litre and Rs 366.28 per 14.2 kg cylinder, respectively, at New Delhi, with corresponding increases across the rest of the country.

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Petrol price up again, this time by Rs 2.5

State-owned oil marketing companies on Saturday raised petrol prices by up to Rs 2.54 a litre. The increase, second in 30 days, came on the back of rising international crude oil prices.

With effect from midnight of Saturday, Indian Oil outlets began selling petrol at Rs 58.37 a litre. The price at HPCL and BPCL will be Rs 58.39 a litre.

With this increase, petrol prices have gone up by nearly Rs 7 a litre, an increase of 13.4 per cent, since being decontrolled last June.

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In the last round of increase on December 15, the three oil companies had raised prices by nearly Rs 3 a litre.

The companies were losing Rs 1.25 at that time on every litre of the fuel sold. This difference has since widened to more than Rs 2 a litre as international crude oil prices have climbed to $92 a barrel.

The government had freed petrol prices in June last year and it would no longer make good any under-recovery incurred by the marketing companies. Despite the deregulation, the oil marketing companies did not pass on the required increase of Rs 4.17 to the consumer and raised prices by Rs 2.95 a litre. The companies consult the oil ministry before announcing a price increase.

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The price of other petroleum products -- diesel, kerosene and LPG -- which together account for over 60 per cent of petroleum products consumption in India, has not been increased since June 25 last year.

Based on the increased crude oil price, the oil marketing companies are expected to incur a revenue loss of Rs 73,000 crore during the current financial year on sale of diesel, domestic LPG and kerosene.