For the fifth time in the past two months, oil marketing companies have increased the price of petrol by 70 paisa per litre, and diesel by 50 paisa per litre with immediate effect, as international crude prices remain at elevated levels. The oil companies have also steeply increased the prices of aviation fuel or ATF by steep 6.3 percent. Accordingly, petrol price in Delhi will go up by 84 paisa (including VAT/sales tax) to Rs 71.28 per litre while it will cost Rs 78.61 per litre in Mumbai as against Rs 77.73 currently. This is the fifth increase in rates since June and in all petrol prices have gone up by a massive Rs 6.82 per litre.
On June 1 petrol price was hiked by 75 paisa, June 16 saw another steeper hike of Rs 2, a Rs 1.82 increase was effected on June 29 and another Rs 1.55 on July 15. In a parallel move, they also hiked diesel rates by 50 paisa, excluding VAT, in line with the January decision of the government allowing them freedom to raise prices in small doses every month to wipe out mounting losses. Diesel price in Delhi has been hiked by 56 paisa to Rs 51.40 per litre while it will cost Rs 58.23 in Mumbai, up from Rs 57.61 currently. The latest hike in the seventh since the January 17 and all losses on diesel could have been covered by now had it not been the steep 12 per cent fall in rupee since April. This has oil firms losing Rs 9.29 a litre on diesel despite prices being raised by a cumulative Rs 3.75 this year.
Announcing the price hikes, IndianOil said it will end the fiscal with a revenue loss of Rs 1,28,500 crore on sale of diesel, LPG and kerosene. "Since the last price change, the international price of petrol has gone up from $117.19 per barrel to $120.05. The rupee-dollar exchange rate, however, has marginally appreciated from 60.03 to 59.49," IOC said in a statement. The combined impact of these factors warranted a price increase of petrol by Rs 0.70 a litre (excluding state levies). Further, pursuant to January 17 order of the government, diesel prices have been revised within a small range of 40-50 paisa per month. "In continuation (of the decision), it has been decided to effect the increase in retail diesel prices. Even after the current increase, under-recovery (loss) on retail diesel shall stand at Rs 9.29 per litre," the statement said.
In addition to diesel, oil marketing companies continue to suffer under-recovery on sale of PDS kerosene of Rs 33.54 per litre and Rs 412 on sale of 14.2-kg LPG cylinder. "For this fiscal, IOC is expected to incur under-recovery of Rs 68,000 crore on sale of diesel, LPG and kerosene and the industry will lose Rs 1,28,500 crore," the statement added. "The movement of prices in international oil markets and the exchange rate is being closely monitored and developing trends of the market will be reflected in future price changes," IOC added. Meanwhile, the oil companies also jacked up ATF prices by a steep 6.3 percent, the third consecutive increase since June, as a falling rupee made imports costlier.
Following this aviation turbine fuel price at Delhi will be costly by Rs 4,169.4 per kilolitre (kl), or 6.3 percent, to Rs 70,203.15. The increase comes on back of a steep 5.8 per cent hike in jet fuel rates on July 1. The Rs 3,617.84 per kl hike on that day came on back ofJune 1 increase when prices climbed to Rs 62,416.16/kl from Rs 62,649.95 previously. The hikes follow two steep reduction in rates – by 5.5 per cent (Rs 3,884.98 per kl) on April 1 and 5.3 per cent or Rs 3,545.94 per kl from May 1. ATF price in March had touched Rs 70,080.87 per kl in Delhi. Officials said the current increase follows continuing fall in rupee against the US dollar, which made import of raw material (crude oil) costlier.
In Mumbai, jet fuel will cost Rs 72,477.50 per kl as against Rs 68,147.9/kl. Rates at different airports vary because of difference in local sales tax or VAT. Kolkata would see price hike of Rs 4,323.1 to Rs 80,317.03/kl, while it will cost Rs 76,312.90 in Chennai as against Rs 71,851.42. Jet fuel constitutes over 40 per cent of an airline's operating costs.
