"Indian Oil Corporation has decided to effect increase in the retail selling price of petrol by Re.0.75 per litre excluding state levies (and), increase in retail selling price of diesel by Re.0.50 per litre excluding state levies," India's largest oil marketing company (OMC) said in a statement.
According to IOC, it had to hike prices due to volatility in the rupee value and hardening of international motor spirit (MS) prices in the international market.
"Since the last price change, international prices of MS have increased and the rupee-dollar exchange rate has depreciated. There is a continued volatility in the international oil prices because of geopolitical and economic developments around the globe."
The three state-run OMCs, which review prices of diesel and petrol every fortnight, last increased petrol and diesel price late last month.
On Dec 20 2012, petrol prices were hiked by 41 paise per litre, and diesel prices were increased by a little under 10 paise per litre, both excluding sales tax or VAT, after the government raised the commission paid to fuel dealers.
While the petrol price is market-linked and revised periodically depending on the international crude oil price, the diesel price is subsidised and the OMCs are only allowed to hike it by a "small amount" every month.
Currently, the government fully subsidises sensitive products like LPG cylinders and kerosene. It partially subsidises diesel price to protect the domestic economy from international crude oil cost fluctuation, as the country imports the majority of its oil needs.
IOC added that it is suffering under-recoveries on sale of LPG (liquefied petroleum gas) cylinders and kerosene.
Allowing for local taxes, the prices per litre of petrol will be Rs.72.43 in Delhi, Rs.79.55 in Kolkata, Rs.79.52 in Mumbai and Rs.75.68 in Chennai.
After adjusting the upward revision, diesel will cost be Rs.53.34 in Delhi, Rs.58.76 in Kolkata, Rs.61.42 in Mumbai and Rs.57.93 in Chennai.
--IANS (Posted on 03-01-2014)