Petrol price hiked by Rs 2 a litre due to weak rupee

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SME Times News Bureau | 17 Jun, 2013
Petrol price was hiked on Saturday by a steep Rs 2 a litre, excluding taxes due to the depreciating rupee and hardening of international prices.

Taking into account local sales tax or value added tax (VAT), the effective price for consumers was work out to Rs.66.39 in Delhi, Rs.73.79 in Kolkata, Rs.74.60 in Mumbai and Rs.69.39 in Chennai.

This is the second increase in petrol prices in this month. The fuel price was hiked by Rs.0.75 per litre June 1, 2013. In June 2010, the government had deregulated the price of petrol and announced that oil companies were free to fix it periodically.

The country's largest oil marketing firm, Indian Oil Corporation (IOC), said the prices had been revised upward due to the depreciation in the value of rupee and rise in international crude oil prices.

"Since the last price change, the slide in rupee has continued. Further, international MS (motor spirit) prices have also hardened during this period. The combined impact of both these factors, has warranted the increase in MS prices," IOC said in a statement.

Since, June 1, 2013, the dollar-rupee exchange rate has deteriorated from Rs.55.32 per one US dollar to Rs.57.08 per one dollar.

According to IOC, the deterioration in US dollar-rupee exchange rate has also resulted in increase in under-recovery on sensitive products.

Currently, the three OMCs are suffering under-recovery in the tune of Rs.6.31 per litre on the sale of diesel, Rs.27.75 per litre on the retail price of kerosene and Rs.335 per cylinder of LPG (liquefied petroleum gas).

"The estimated under-recovery of the Corporation on sale of these three sensitive products is estimated to be around Rs. 60,000 for the fiscal 2013-14 (industry estimates at around Rs.112,500 crore)," the statement added.