Petrol prices up for 3rd time in June

NEW DELHI: State-run fuel retailers on Friday decided to raise petrol price by Rs 1.82 a litre, excluding state taxes, to pass on the impact of the falling rupee and the fuel's rising price in international trading hubs.

This is the third hike this month and the new prices would be affective intervening from Friday midnight. The actual increase at petrol pumps would be higher due to incremental increase in state levies.

Sources said the retailers are set to raise dieselprice by 40-50 paise a litre early next week in line with the government's January decision to gradually move to market pricing with hikes of small dozes.

The latest increase wipes out the impact of four reductions this year till May. "Since the last price change, the downward slide of rupee has continued and dollar-rupee exchange rate has deteriorated from Rs 57.08 to the greenback to Rs 58.94 during the fortnight," IndianOil Corporation said in a statement.

Besides, international gasoline - trade name for petrol — prices have also increased from $113.84 per barrel to $115.29 a barrel since the last price change, IOC said explaining the need for the latest hike.

The combined impact of depreciating rupee and rising international prices warranted the increase in petrol prices by Rs 1.82 per litre, excluding VAT.

The depreciating rupee has led to widening of losses on diesel and cooking fuel. Oil firms are now losing Rs 8.60 per litre on diesel compared to Rs 6.31 previously. Diesel prices have been hiked on five occasions since January when the government authorized state-owned oil firms to increase prices by up to 50 paisa per litre every month till entire losses on the fuel are wiped out.

Since diesel price was hiked by 50 paisa, excluding VAT, on June 1, the next increase will happen at the month end. Oil firms are losing Rs 30.53 per litre on kerosene sold through public distribution system and Rs 368.50 per 14.2-kg cooking gas cylinder.

"Estimated under-recovery of IOC on sale of these three sensitive products is expected to be around Rs 63,000 crore for the fiscal 2013-14 (industry estimates at around Rs 118,000 crore)," IOC said.