IOC hikes petrol rate by Rs 2.96 a litre

A day after BPCL raised petrol prices, state-run Indian Oil Corp (IOC), the nation's largest fuel retailer, today hiked petrol prices by Rs 2.96 per litre effective midnight tonight.

The biggest hike in six months follows international crude oil prices climbing to USD 90 per barrel, but it is still short of the desired Rs 4.17 a litre increase that would have made domestic prices on par with market rates.

Bharat Petroleum Corp Ltd (BPCL) had yesterday announced a hike of Rs 2.95 per litre in petrol prices in Delhi, with effect from today. Hindustan Petroleum Corp Ltd (HPCL), the third state fuel retailer, also hiked petrol prices by Rs 2.94 per litre effective midnight tonight.

"Petrol at IOC pumps in Delhi will cost Rs 55.87 per litre from midnight tonight," a company official said.

The fuel at HPCL pumps would be sold at Rs 55.85 per litre while it is priced at Rs 55.86 a litre at BPCL pumps.

The state-retailers are deliberately adopting marginally different rates and effecting hikes at different times to avoid being accused of acting as a cartel in the free market.

The government had in June this year freed petrol prices, but the state firms, who control 98 per cent of the retail market, continue to informally consult the oil ministry before revising prices.

Sources said a Rs 2 per litre hike in diesel prices is on the agenda of an Empowered Group of Minister headed by Finance Minister Pranab Mukherjee when it meets on December 22.

The oil firms are losing Rs 5.40 per litre on selling diesel below import cost, sources said.

Petrol in Mumbai will cost Rs 60.46 a litre at IOC pumps as against Rs 57.35 a litre currently. In Kolkata, the hike is of Rs 3.09 to Rs 59.90 per litre while in Chennai the price have been hiked to Rs 60.65 per litre from Rs 57.44 a litre.

The oil firms had on June 26 raised petrol price by Rs 3.50 a litre, coinciding with the government decision to make the rates market determined.

After today's increase, petrol prices have gone up by Rs 4.44 a litre since deregulation.

The basket of crude oil India buys has averaged $88.47 per barrel in December as against about $79 a barrel at the time of last hike in petrol price on November 9. The oil firms had raised petrol price by Rs 0.32 a litre just before the Parliament's winter session began.

If diesel prices are not revised, IOC, BPCL and HPCL are likely to end the fiscal with close to Rs 67,000 crore revenue loss. This figure includes loss on account of selling domestic LPG and kerosene below cost.

The oil retailers lose Rs 272.19 on the sale of every 14.2-kg LPG cylinder and Rs 17.72 per litre of kerosene.