With rupee depreciation leading to jump in oil import bill, Petroleum Minister S. Jaipal Reddy on Tuesday said there is an immediate need to raise fuel prices, but refused to say when the hike will actually take place.
"It (price increase) is very essential but (before hiking rates) we have to talk to political parties," he told reporters here on way to Ashgabat for signing of the agreement for the Turkmenistan-Afghanistan-Pakistan-India pipeline.
The government had decontrolled petrol price in June 2010 but rates were last increased on November 4 last year. This despite oil price rising by 14 per cent and 7 per cent fall in value of rupee against the dollar.
Price of diesel, kerosene and cooking gas were raised in June last year.
"If rupee depreciates by one against the dollar, our oil companies lose Rs8,000 crore (annually)," Reddy said. "Rupee yesterday dipped (to an all-time low of) Rs55 (to a US dollar). Last year it was Rs46. This translates into a loss of Rs72,000 crore (on account of rupee depreciation) this year."
"Seeing all this, something needs to be done, but when will it be done, how it will be done... I cannot make a forecast," Reddy said. "There is no decision on raising price or not raising prices".
State-owned oil firms, who had in the fiscal ending March 31, 2012 lost Rs4,860 crore on petrol sales, are currently losing Rs6.28 per litre on petrol. After including 20 per cent VAT, the desired increase in petrol price in Delhi comes to Rs7.53 a litre.