We need a bigger petrol hike: IOC

Facing criticism for increasing the retail price of petrol, government-owned Indian Oil Corporation today 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. 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.