Pricier fuel: Petrol and diesel rates were hiked on all days last week

In seven hikes, petrol price has been raised by Rs 3.9 per litre and diesel by Rs 4. Price rise could continue for a few more days, as global product prices are firming up with a pick-up in demand

Petrol price was raised by 59 paise per litre and diesel price by 58 paise per litre on Saturday, as oil companies adjusted retail rates in line with costs for a seventh straight day -- after an 82-day hiatus in rate revision, PTI reported.

Petrol price in Delhi was hiked to Rs 75.16 per litre from Rs 74.57, while diesel rates were increased to Rs 73.39 a litre from Rs 72.81, according to a price notification of state oil-marketing companies. Rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or VAT.

This is the seventh daily increase in rates in a row since oil companies on Sunday restarted revising prices in line with costs, after ending an 82-day hiatus. In seven hikes, petrol price has gone up by Rs 3.9 per litre and diesel by Rs 4.

The freeze in rates was imposed in mid-March soon after the government hiked excise duty on petrol and diesel to shore up additional finances.

Oil PSUs Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), instead of passing on the excise duty hikes to customers, adjusted them against the fall in the retail rates that was warranted because of a decline in international oil prices.

Petrol and diesel prices continued to rise through the week with the two petroleum products getting dearer by 59 and 58 paise per litre on Saturday.

The auto fuel prices have now risen seven days in a row with pump prices of petrol increasing by Rs 3.90 and diesel by Rs 4 per litre since Sunday. All through the week petrol and diesel prices have risen by about 60 paise per litre per day barring Tuesday when the rise was marginally lower at 40 paise per litre, IANS reported.

Sources in oil marketing companies said that price rise could continue for few more days as global product prices are firming up with a pick up in demand following opening up of economies across the globe post Covid-19 related lockdown. Even global crude prices have more than doubled from April levels at close to $40 a barrel level.

Also, OMCs are catching up on price levels that bring the product prices closer to international benchmark rates. The price freeze of 83 days even with a substantial increase in excise duty on petrol and diesel by the Centre, has increased the price gap resulting in losses on sale of product for OMCs.

The increase in retail prices on Saturday has been made under the dynamic pricing system for daily revision of fuel prices which OMCs resumed after over 83 days break during the lockdown period.

In the national capital, the retail price of petrol increased by 59 paise and diesel by 58 paise per litre to Rs 75.16 and Rs 73.39 per litre respectively.

In other cities, the increase could vary depending on the tax structure on products. IANS had published earlier that daily price revision may begin in June and retail prices of petrol and diesel could go up to Rs 5 a litre in phases.

Prices of transportation fuel were last revised under the dynamic pricing policy on March 16 and there were few instances of price hike later only when the respective state governments hiked VAT or cess.