Diesel, petrol prices up on hike in dealer commissions

Petrol prices may further go up by 20 paise owing to strengthening of prices in international markets and weakening of rupee

The government on Friday decided to increase the commission of dealers, leading to an increase in diesel prices by 10 paise per litre and petrol by 21 paise per litre.

In addition to this, due to strengthening of prices in international markets and weakening of rupee, petrol prices would be increased by another 20 paise per litre. The combined impact of aforesaid rise on petrol comes to around 41 paise per litre, state-run IndianOil Corporation said in a statement.

The ministry of petroleum said in a statement today that the government has now decided to revise dealer commission from Rs 1089 per kilo litre to Rs 1186 per kilo litre for the entire country with immediate effect. This was last revised on October 2012 from Rs 912 per kilo litre to Rs.1089 per kilo litre.

Despite the hike, the under recovery on sale of diesel now stands at Rs 10.48 per litre, whuile that of kerosene at Rs 36.2 per litre and domestic LPG at Rs 542.5 per cylinder. For the financial year, the under recovery for oil marketing is expected to be around Rs 1,43,800 crore, while that of IOC would be around Rs 74,700 crore.

The implementation of the revision was delayed due to the election process happened in states and union territories. “The increase in commission would increase diesel prices by 10 paise, and another 1 paise would be added in the form of taxes,” said Ajay Bansal, Federation of All-India Petroleum Traders (FAIPT). In Delhi, the prices would be Rs 53.77 per litre, compared to Rs 53.67 per litre now.

Since, revision in dealer’s commission on diesel is being done on an annual basis, public sector oil marketing companies (OMCs) were requested by the ministry to rework the quantum of dealer’s commission on diesel keeping in mind escalations that may have occurred in the meantime.