Petrol follows onions in hike
New Delhi: Even as the government is battling inflation on several fronts, state oil companies announced an increase of about four and two percent, respectively, in the prices of petrol and aviation fuel, with international crude prices going towards the $100 per barrel mark.
According to informed sources, three state oil marketing companies, Indian Oil, Bharat Petroleum and Hindustan Petroleum, will raise their price for petrol ranging from Rs.2.50 to Rs.2.54 per litre.
In retail outlets of Indian Oil in Delhi, a litre of petrol will now cost Rs.58.37 from midnight - a rise of 4 per cent. It will be a slightly more expensive at retail outlets of Hindustan Petroleum and Bharat Petroleum, where a litre will cost Rs.58.39.
The increase comes as the international crude price came within a whisker of the $100 per barrel price on Friday, the highest in two years. In London, Brent crude went up to $99.20, which is the highest since October 2008.
In December, Indian crude basket had a average price of $89.78 per barrel, but in the new year, it has already increased over 3 percent to $92.8 per barrel.
With 80 per cent of India's fuel consumption met through imports, it means that oil marketing companies had to face losses, as they sell subsidized fuel products.
In June last year, the government had allowed oil marketing companies to set the price of petrol as per the market situation. Oil companies had hiked the price of petrol by Rs.3 per litre - a increase of over five per cent, from Dec 16, 2010.
Besides, Aviation Turbine Fuel will increase by 2 per cent to Rs.48,764 per kilolitre from Jan 16. So far, oil companies have increased ATF seven times since October 2010. The last one was a hike of Rs.935 per kilolitre from Jan 1.
But, the government has still to increase the rate of diesel and cooking fuels, despite the state companies suffering huge losses. It has however not done so, afraid of the backlash from allies and opposition, with the inflation index rising steadily.
Inflation has now become a political hot potato, as the index creeps up week after week.
India's annual rate of inflation based on wholesale prices rose to 8.43 per cent in December, according to official data released on Friday. The previous month the figure stood at 7.48 per cent. The fuel inflation rose to 11.19 percent in December from 10.3 per cent in November.
The government Thursday announced a slew of anti-inflation measures, including steps to regulate exports and imports, sale of onions through government agencies, utilising state-run companies to source pulses, and stringent action against hoarders.
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