New Delhi: State-owned oil companies on Thursday hiked petrol prices by Rs 3.14 per litre as a fall in rupee increased the cost of importing the raw material (crude oil).

READ MORE: EGoM to consider limiting supply of LPG

Petrol price in Delhi will be hiked by Rs 3.14 a litre in Delhi to Rs 66.84 per litre with effect from midnight tonight, a top official at a state-run fuel retailer said.

Current petrol price of Rs 63.70 per litre corresponds to crude oil price of about USD 103 per barrel. But crude on Thursday is at USD 110-111 per barrel. This difference coupled with rupee declining to two-year low of 48 to US dollar necessitated an increase in retail price, he said.

This is the second hike in four months. Oil companies had last hiked petrol price by Rs 5 per litre on May 15.

"We were losing Rs 2.61 per litre or Rs 15 crore per day on sale of petrol. After adding sales tax or VAT, the hike needed to level domestic rates with international prices came to Rs 3.14 per litre in Delhi," another official said.
Petrol prices vary from city to city depending on VAT and other local levies.

Petrol price were freed from the government control in June last year but the retail rates have not moved in line with cost as high inflation rate forced the oil companies to seek 'advice' from parent oil ministry before revising rates.

IOC, BPCL and HPCL lost Rs 2,450 crore this fiscal on selling petrol below the cost.

Besides petrol, the three firms are losing Rs 263 crore per day on selling diesel, domestic LPG and kerosene below cost. Diesel is being sold at a subsidy of Rs 6.05 a litre, kerosene at Rs 23.25 per litre while domestic LPG rates are under-priced by Rs 267 per 14.2-kg cylinder.

Rupee fell to 48 per dollar on Wednesday for the first time since September 2009. "Every rupee depreciation, the under- recovery (revenue loss) increases annually by around Rs 9,000 crore," the official said.

BJP demands rollback in petrol prices

Terming the hike in petrol prices as "anti-people", BJP on Thursday demanded its rollback, alleging that the government's argument of inflation going up due to growth had fallen flat as cost of essential commodities was going up while GDP was falling.

"BJP condemns this hike in petrol prices by Rs 3 per litre. We demand a roll back as this measure is against the common man. The UPA allies of Congress should also oppose this hike," party spokesperson Shahnawaz Hussain said.

Hussain said inflation has touched double digits and government argument of growth leading to increase in prices does not hold good as GDP is falling.

"The government is losing sleep due to its concern for profits of oil companies. This hike in petrol prices has been done for their benefit," Hussain said.

He alleged that while the attention of the masses is focused on the slew of corruption cases and scams being unearthed, the government has used this opportunity to hike petrol prices "on the sly".

Naveen criticises petrol price hike

Slamming the hike in petrol prices, Orissa Chief Minister Naveen Patnaik on Thursday demanded that the Centre roll it back to avoid a further burden on the common people.

"The hike in petrol prices will further burden the common man as we are told that the rate of inflation is almost ten per cent," Patnaik said here.

Stating that this was the second increase in petrol prices in the last four months, he said, "I urge the Centre to roll back the petrol price hike."

SAD, BJP flay petrol price hike

Chandigarh: The increase in price of petrol on Thursday evoked sharp reaction from Shiromani Akali Dal (Badal) in Punjab, with party President Sukhbir Badal seeking a transparent formula to fix fuel price.

Lashing out at Congress for increasing petrol price by over Rs 3 a litre, Badal said in a statement that despite crude prices dropping in international market, the UPA government raised the price on the plea of weakening of rupee against US dollar.

He demanded that an all-party committee should be constituted to determine the rate of petroleum products in order to bring transparency in its price fixation. "...but Congress led UPA government in order to help the oil companies, was scuttling all such proposals," he alleged.

Trinamool Congress protests petrol price hike

The petrol price hike tonight evoked sharp protest from Trinamool Congress, the second largest constituent in the UPA government, which alleged it was not consulted.

"Trinamool Congress, despite being a partner of the UPA government, was not consulted at all before such a decision was taken. I have expressed our party's unhappiness to Pranab Mukherjee," Trinamool Congress' general secretary Mukul Roy said.

"We have registered our unhappiness over this decision," Roy, who is also the Union minister of state for Shipping, said.

Stating that there was a petrol price hike three months ago, he said, "this type of price increase always hits the common man."

It is the second hike in four months. Oil companies had last hiked petrol price by Rs 5 per litre on May 15.

Jaya condemns petrol price hike, demands rollback

Slamming the Centre for the hike in petrol price, Tamil Nadu Chief Minister Jayalalithaa on Thursday demanded its immediate rollback as it would badly hit the common man.

"At a time when inflation is rising, instead of taking steps to control prices, the Centre's action in hiking petrol prices is strongly condemnable. I condemn the fuel price hike," she said in a statement tonight.

The latest hike would decrease the purchasing power of people, the chief minister said.

Jayalalithaa said the Centre had been increasing the prices of petroleum products, unmindful of the fact that such action affects the common man.

She said the increase in the prices of LPG, diesel and kerosene in July had also affected the people leading to spurt in prices. The latest hike would mainly affect people using two-wheelers.

Petrol price hike to impact inflation marginally: Industry

The hike in petrol prices will lead to a small increase in inflation, industry chambers CII and Ficci said on Thursday.

However, they said that there was no alternative for the government-owned oil companies but to revise the prices in the backdrop of weakening of rupee which resulted in higher landed cost of crude oil.

"The hike was necessary for controlling the under- recoveries of the oil marketing companies. Although this may add a bit to inflation, the alternate scenario of not hiking would mean a further increase in the fuel subsidy," CII Director General Chandrajit Banerjee said.

A similar view was expressed by Ficci. "The impact (on inflation) will be there. Of course, it will hurt. But if you don't do this, subsidies increase will lead to fiscal deficit," chamber Secretary General Rajiv Kumar said.

Taking into account the exchange rate differences such price changes are in order, he said.

The oil companies hiked petrol prices by Rs 3.14 per litre. This is the second hike in four months. Oil companies had last hiked petrol price by Rs 5 per litre on May 15.

General and food inflation remain near the double-digit, causing problem for the common-man. Commenting on the latest round of hike Assocham Secretary General DS Rawat said: "We do not want the bottom lines of oil marketing companies to be hurt, but the steep hike in petrol prices is going to severely cripple the competitiveness of the Indian manufacturing sector".

Protests across UP against petrol price hike: BJP

Terming hike in petrol price as a major blow to the people already reeling under high inflation, the BJP has decided to stage demonstrations across Uttar Pradesh on Friday.

"The party will hold demonstrations at all district headquarters in the state on Friday to protest against hike in petrol prices," BJP state unit chief Surya Pratap Shahi said.

"Common people are not in position to bear any additional burden at this stage," he said.

Meanwhile, RLD state president Ashok Singh also demanded roll back hike in price of petrol.

"Hike in petrol price will directly affect the common man and it should be rolled back immediately," he said.

(JPN/Agencies)