Thaindian News

New Delhi, Nov 3 (IANS) Oil marketing companies Thursday raised petrol prices by Rs.1.80 per litre effective from midnight, just over a month and a half since the last hike - dealing a double blow to consumers already reeling under high, double-digit inflation.

The hike was to fight depreciation of the rupee and high global crude prices, the oil firms said.

“The prices would be hiked from Friday. All three companies have decided to hike prices by Rs.1.80 per litre,” an Indian Oil Corporation (IOC) official told IANS.

The latest hike of Rs.1.80 per litre — the 11th time since June 2010 — comes over and above a steep upward revision of Rs.3.14 a litre on Sep 15, 2011.

“Government should realise the fact that this is a wrong time to raise petrol prices, as everything, including food items, are so expensive. I feel this will certainly add more burden on the middle class,” said Vishal Datta, an employee with an infrastructure firm.

The decision to hike petrol prices was taken by state-run oil marketing companies Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp.

Petrol is deregulated, giving oil marketing firms the freedom to change retail prices, they still require the government’s approval to effect any changes in the prices of diesel, kerosene and cooking gas.

Meanwhile, the consumers were given no respite even on the prices of essntial items like food. The latest official data for food inflation showed a sharp rise during the week ended Oct 22 at 12.21 percent — the highest in nine months.

Prices of pulses, vegetables and milk and poultry all rose. The week before had seen food inflation logging at 11.43 percent.

The hike comes two days after one of the OMCs said it was considering a hike in petrol prices given the high crude oil prices and depreciating value of the rupee against the dollar.

“We are at present losing Rs.1.50 per litre on petrol. To make up for this loss, a desired increase in retail price should be at least Rs.1.82 a litre,” B. Mukherjee, director-finance, Hindustan Petroleum Corporation Limited (HPCL), had said Tuesday.

International prices of crude were hovering around $108 per barrel (159 litres), while the rupee had depreciated from 46.50 a dollar three months ago to over 49 per dollar now - which has resulted in an increase in the cost of oil imports.

The average cost of the Indian basket of crude went up to $108.73 per barrel, rising from $103.63 a barrel Oct 1-16.

The three OMCs are expected to lose together around Rs.1,30,000 crore in revenue this fiscal on selling subsidised diesel, domestic LPG and kerosene.

“Oil marketing companies (OMCs) have reported an under-recovery (revenue loss) of Rs.21,374 crore in the July-September quarter,” Oil Secretary G.C. Chaturvedi, told reporters here Wednesday.

In the April-September period, the three firms lost Rs.64,900 crore on selling diesel, domestic LPG and kerosene.