The government is likely to give a subsidy of Rs 30,000-35,000 crore to state-run oil companies - Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) - to compensate for losses incurred from selling LPG at below cost over the past 15 months, according to a senior official.
Petrol price on Tuesday was increased by 15 paise per litre and diesel by 18 paise as State-owned fuel retailers started passing on the increase in international oil prices to consumers after an 18-day hiatus.
The new prices are effective from Sunday midnight.
"Yesterday's GoM meeting was inconclusive as two ministers were not present. We did discuss some proposals and I hope the GoM and government will find a solution (to the spike in crude oil prices)," Petroleum Minister Murli Deroa told reporters in New Delhi on Friday.
The government on Thursday hiked petrol and diesel prices by a marginal Rs 0.27 a litre and Rs 0.15 per litre respectively following increase in the commission paid to petrol pump dealers.
The price of petrol has been hiked by Rs 1.39 per litre and that of diesel by Rs 1.04 a litre, in sync with firming international rates.
Petrol and diesel price hikes are likely to resume after state elections get over next week to bridge the Rs 9 a litre gap created by international oil prices soaring past $100 a barrel. International crude oil prices shot above $110 a barrel for the first time since mid-2014 on fears that oil and gas supplies from energy giant Russia could be disrupted, either by the conflict in Ukraine or retaliatory western sanctions. The basket of crude oil India buys rose above $102 per barrel on March 1, the highest since August 2014, according to information from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry.
Petrol and diesel prices were cut by Rs 2 per litre each as state-owned oil companies ended a nearly two-year-long hiatus in rate revision, just hours before the general election schedule was announced.
Fill up the tanks of your cars and scooters before the weekend before petrol prices shoot up.
With inflation at peak levels, a further rise in petrol prices would again lead to higher prices.
Petrol and diesel prices, which have been on a freeze for the past four months in view of assembly elections in states like Uttar Pradesh, need to be increased by over Rs 12 per litre by March 16 for fuel retailers to break even. International crude oil prices shot above $120 a barrel for the first time in nine years on Thursday before retreating a little to $111 on Friday, but the gulf between cost and retail rates has only widened. With international oil prices - on which domestic fuel retails are directly benchmarked - spiking in the last two months, state-owned fuel retailers "need a massive price hike of Rs 12.1 per litre on or before March 16, 2022, just to breakeven and a price hike of Rs 15.1 is required" after including margins for oil firms, ICICI Securities said in a report.
With this increase, diesel prices have touched a record high while petrol is at a 56-month peak.
Protest programmes against the hike will be held by Leftist organisations throughout the state from May 26 to May 30 and rallies will be organised on May 31, he said.
Petrol and diesel prices are likely to be hiked this week as oil companies prepare to pare losses accumulated from keeping rates steady for over four months in the run-up to assembly elections in five states, including UP, despite international oil prices jumping to a 13-year high of $140 per barrel. West Texas Intermediate crude futures, the US oil benchmark, rose to $130.50 per barrel on Sunday evening, its highest since July 2008, before retreating. The international benchmark, Brent crude, hit a high of $139.13 at one point overnight, also its highest since July 2008.
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The hike in prices of petrol and diesel seems to have been put on the backburner with the price of the basket of crude oil that Indian refiners
The Cabinet Committee on Economic Affairs did not take up the issue of hike in petroleum prices on Thursday, Commerce Minister Kamal Nath said.
Petrol price on Friday scaled to Rs 102 per litre in some parts of Rajasthan and Madhya Pradesh after rates were raised for the fourth straight day after ending more than two-week-long hiatus during assembly elections in states like West Bengal. On Friday, petrol price was hiked by a steep 29 paise per litre and diesel by 31 paise a litre, according to a price notification by state-owned fuel retailers. This took the price of petrol in Delhi to Rs 91.27 per litre and that of diesel to Rs 81.73.
Union Minister Nityanand Rai launched a scathing attack on Congress, stating that the party takes "pleasure" in insulting Bihar and its people.
The Congress government had always tried to deal blow to poors, the Bihar Chief Minister said, adding the price of petrol would also increase inflation and it will add to the people's misery.
Bollywood celebrities took to Twitter to vent their ire over the steepest ever hike in petrol prices.
Petrol price on Wednesday neared all-time high after state-owned fuel retailers hiked rates after a nearly month-long hiatus. Petrol price was raised by 26 paise per litre and diesel by 25 paise a litre, according to a price notification from oil marketing companies. After this increase, petrol in Delhi climbed to Rs 83.97 per litre from Rs 83.71 previously. Diesel rates rose to Rs 74.12 per litre from Rs 73.87. In Mumbai, diesel touched an all-time high of Rs 80.78.
In four hikes over four days, petrol price has gone up by Rs 2.14 per litre and diesel by Rs 2.23.
A government official said out that with hardly any economic activity, an immediate duty hike will not be productive and could be announced once the lockdown eases and demand revives.
The Union government will gain close to Rs 1.6 lakh crore in additional revenues this fiscal from a record hike in excise duty on petrol and diesel that has pushed the total incidence of taxation on auto fuels to 70 per cent of the price. Late on Tuesday evening, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre to mop up gains arising from international oil prices falling to a two-decade low.
The chief minister, however, justified the steep hike saying oil companies were incurring huge losses and the hike was necessary. She was on a private visit to Jammu.
Cooking gas LPG price on Wednesday was hiked by Rs 15 per cylinder in line with a surge in international fuel prices. Rates of both subsidised and non-subsidised LPG prices were hiked, oil company officials said. Cooking gas now costs Rs 899.50 per cylinder in Delhi.
State-owned oil firms may hike petrol price by about Rs 0.50 per litre from June 16 as last month's steep increase in rates is not enough to cover the cost of raw material (crude oil).
After Delhi, CNG price in Mumbai has been hiked by Rs 1.50 per kg and the rate of cooking gas piped to houses by Re 1 due to rise in input costs. Mahanagar Gas Ltd, which retails CNG to automobiles and piped natural gas to households for cooking purposes in Mumbai and surrounding cities, said the increased prices will come into effect from the intervening night of July 8 and 9.
Oil companies choose to skip the revision this time.
While corruption and inflation have made life difficult for the common man, the government's decision to hike petrol prices has only added fuel to fire, anti-graft crusader Anna Hazare has said. "My activists will support the Bharat Bandh called by the BJP and Left parties on May 30 to protest the petrol price hike," Hazare said while addressing a public meeting.
State-owned oil companies may raise petrol prices by Rs 1.50-Rs 2 per litre early next week, while a Rs 2 a litre hike in diesel rates is under the government consideration, a senior official said.
The Congress is yet to form a government at the Centre but it faces the prospect of being credited with a highly unpopular decision of a one-rupee per litre hike in petrol and diesel prices.
A rise in international oil prices and depreciation in rupee have necessitated a Rs 1.40 per litre increase in price of petrol with effect from midnight tonight, said a statement by Indian Oil Corporation.
The government has put off by one month the levy of an additional Rs 2 per litre excise duty on petrol and diesel that is not doped with ethanol and bio-diesel in a bid to give the industry more time to implement the measure.
Diesel, which is sold at Rs 53.67 a litre in Delhi, will cost Rs 53.77 after the hike in commission.
On Friday govt increased the petrol price by Rs 1.40 a litre.
Petrol price was tonight hiked by about 35 paise per litre in line with firming raw material cost.
Oil companies have welcomed the hike in petrol and diesel as it will help them cut losses on sale of fuel.
The Bhartiya Janata Party on Sunday asked the government to unveil a concrete action plan to curb inflation effectively in a month and demanded an immediate roll back in the hike of fuel prices.
