Diesel price needs to be revised upward, or subjected to higher taxes, as misuse of subsidized diesel was adding to pollution and public health costs, the government's pre-budget economic report card said on Thursday.
After a spike, losses on sale of diesel have fallen by nearly a rupee to Rs 2.49 per litre as international oil rates have moderated.
Car sales in India grew 13.11 per cent to 2,11,402 units in February as customers rushed to buy vehicles fearing rise in prices post the Union Budget, to be presented this week.
Car sales in India grew 13.11 per cent to 2,11,402 units in February as customers rushed to buy vehicles fearing rise in prices post the Union Budget, to be presented this week.
Petrol price will be cheaper by 49 paise/litre and diesel by Rs 1.21.
India's fuel sales fell in the first half of April as a record rise in prices in a short 16-day period dented demand, preliminary industry data showed on Saturday. Petrol sales fell almost 10 per cent in the first half of April when compared with the same period in the preceding month, while diesel demand slid 15.6 per cent. Even cooking gas LPG, which had consistently shown growth even during the pandemic period, saw a 1.7 per cent month-on-month fall in consumption during April 1-15.
The Congress took out marches and observed bandh at several places on Saturday to protest against rising fuel prices.
The government is unlikely to raise petrol and diesel prices before the end of the current monsoon session of Parliament and may moderate the hike with a dose of excise duty cut, a top official said on Wednesday.
The proposed price increase, the first in 18 months, is likely to be in the range of Rs 2 per litre for petrol and Re 1 per litre for diesel, senior petroleum ministry officials said.
The government will decide on increasing petrol, diesel, LPG and kerosene prices within the next 24-48 hours.
The oil ministry is in fact of the view that the government should bear the entire burden of the revenue losses incurred by the oil marketing companies, after the increase in prices is effected.
Petrol price was cut by Rs 2.43 per litre and diesel by Rs 3.60 a litre, the third reduction in rates this month.
Petrol and diesel price on Sunday was hiked again by 35 paise a litre and the auto fuels now cost a third more than the rate at which ATF is sold to airlines. The fourth straight day of 35 paise per litre hike sent petrol and diesel rates to record highs across the country. The price of petrol in Delhi rose to its highest-ever level of Rs 105.84 a litre and Rs 111.77 per litre in Mumbai, according to a price notification of state-owned fuel retailers.
The government had, on June 25, freed petrol price from its control resulting in a hike of Rs 3.50 per litre.
With Indian Oil, Hindustan Petroleum and Bharat Petroleum projected to lose Rs 200,000 crore (Rs 2,000 billion) in revenues on sale of petrol, diesel, domestic LPG and kerosene below import cost, industry sources said a hike in the range of Rs 2 to 5 per litre appears on the cards.
State-run Indian Oil Corporation, the country's largest oil refining and marketing firm, today sought a Rs 5.18 per litre hike in the price of diesel and Rs 4.59 per litre increase in petrol prices mainly due to the surge in global crude oil prices.
Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages.
Prime Minister Narendra Modi on Friday announced a Rs 100 per cylinder cut in cooking gas LPG price to ease financial burden on households. Non-subsidised cooking gas price will be cut to Rs 803 per 14.2-kg cylinder in the national capital with effect from midnight of Friday/Saturday, official sources said. Prices vary from state to state depending on the incidence on local taxes.
India's top fuel retailers IOC, BPCL and HPCL together lost around $2.25 billion (Rs 19,000 crore) in revenue for keeping petrol and diesel prices on hold during elections in five states, including Uttar Pradesh, Moody's Investors Services said on Thursday. State fuel retailers did not revise petrol and diesel rates for a record 137 days despite prices of crude oil (raw material for producing fuel) rising to $120 per barrel compared to around $82 in early November when the hiatus began. "Based on current market prices, the oil marketing companies are currently incurring a revenue loss of around $25 (over Rs 1,900) per barrel and $24 per barrel on sale of petrol and diesel, respectively," Moody's said in a report.
No change in retail prices as oil marketing firms to absorb increase
While LPG price was raised by Rs 18, kerosene saw a hike of Rs 3 per litre
International crude oil prices crossed the $60 a barrel mark yesterday--up from a record low of $32.40 in December last year--on the back of improved sentiment over the economic recovery, especially in China and Europe.
Strongly opposing major reforms announced by the Centre, key United Progressive Alliance constituent Trinamool Congress on Friday set a 72-hour deadline to the government to withdraw decision on multi-brand retail and diesel price hike.
Jet fuel prices on Saturday were hiked by a marginal 0.2 per cent -- the eighth straight increase this year -- to an all-time high, reflecting a surge in global energy prices. The price of aviation turbine fuel (ATF) -- the fuel that helps aeroplanes fly -- was hiked by Rs 277.5 per kilolitre, or 0.2 per cent, to Rs 113,202.33 per kl (Rs 113.2 per litre) in the national capital, according to a price notification of state-owned fuel retailers. Meanwhile, petrol and diesel prices remained unchanged for the 10th straight day after rising by a record Rs 10 per litre each.
LPG rates were last hiked on November 1 by Rs 2.05 per cylinder. Prior to that rate was hiked on October 28 by Rs 1.5 per cylinder on account of hike in commission paid to dealers.
A Rs 3-4 a litre hike in the price of petrol, which had been freed from government control last June, is also on the cards immediately after polling in the last phase of Assembly elections is completed on May 10.
A new formula for pricing natural gas in the domestic market was determined; the decontrol of diesel prices was announced; and the scheme that directly transferred subsidies to bank accounts of users of liquefied petroleum gas (LPG) cylinders was modified and relaunched.
Customers have started to factor in the narrowing gap between petrol and diesel and the premium that needs to be paid for a diesel vehicle.
Petrol price on Tuesday crossed Rs 99 a litre mark in Mumbai after oil companies raised petrol and diesel rates on surge in international oil prices. Petrol price was increased by 27 paise per litre and diesel by 29 paise, according to a price notification of state-owned fuel retailers. The hike - tenth this month - pushed petrol and diesel prices to an all-time high across the country. In Delhi, petrol rates climbed to Rs 92.85 a litre and diesel rose to Rs 83.51.
Every year, carmakers announce at the end of November or December their plans to increase prices of their vehicles by January.
Under-recovery or the difference between retail price and its imported cost on diesel was 8 paisa per litre in the first half of September.
Car maker Volkswagen India on Monday said it will hike the prices of the diesel variant of its mid-sized sedan Vento by 2.2 per cent from July 1 to offset higher input costs.
With Brent crude oil prices dipping below $100 per barrel, petrol prices may be cut by Re 1 a litre and there is also a likelihood of first reduction in diesel rates in seven years.
CNG and piped cooking gas prices in cities such as Delhi and Mumbai may be hiked by 10-11 per cent next month as the government-dictated gas price is set to rise by about 76 per cent, ICICI Securities said in a report. The government, using rates prevalent in gas-surplus nations, fixes the price of natural gas produced by firms such as state-owned Oil and Natural Gas Corp (ONGC) from fields given to them on nomination basis, every six months. The next review is due on October 1.
The calculations done on June 25 were mostly based on the average international price in the first fortnight of June.
Fuel rates were last revised on February 1 when petrol price was cut by a marginal 4 paise a litre.
Gandhi said the one paisa cut in petrol rates was not a "suitable response" to the fuel challenge he threw to the prime minister a few days ago.
The Oil Ministry has proposed a Rs 3-4.50 per litre hike in diesel price and Rs 100 in LPG rates along with raising the number of subsidised cooking gas cylinders for households to nine a year from the current cap of six.
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