Petrol, diesel prices hiked; Expect further increase in coming days

The fuel prices were hiked with effect from 6.00 am this morning (May 18) and the price of petrol in Delhi now stands at Rs. 75.61 per litre and that of diesel is Rs. 67.08 per litre.

After the rate revision, the price of petrol in other cities are: Rs. 76.83 per litre in Bengaluru, Rs. 78.29 per litre in Kolkata, Rs. 83.45 per litre in Mumbai and Rs. 78.46 per litre in Chennai.

And the diesel prices in different cities are: Rs. 68.23 per litre in Bengaluru, Rs. 69.63 per litre in Kolkata, Rs. 71.42 per litre in Mumbai, Rs. 70.80 per litre in Chennai.

As per a PTI report, the petrol and diesel prices could be increased by as much as Rs 4 in coming days.

No sooner had Karnataka polled to elect a new state government, that state-owned Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. on Monday ended a 19-day hiatus in revising petrol and diesel prices and reverted to the practices of changing rates on a daily basis.

"Our computation suggests that downstream oil marketing companies are required to increase retail prices of diesel by a steep Rs 3.5-4 a litre and gasoline prices by Rs 4-4.55 per litre in the coming weeks to earn normative gross marketing margins of Rs 2.7 per litre," Kotak Institutional Equities said in a report, as per PTI.

Last week, ICICI Securities had said that auto fuel net marketing margins were weak at Rs 0.31 a litre due to no price hike after April 24. OMCs returned to daily price revision from May 14. They are estimated to have lost about Rs 500 crore on absorbing higher cost resulting from the spike in international oil rates and fall in rupee against the U.S. dollar.

The benchmark international rate for petrol, used for revising rate on April 24, had gone up from $78.84 per barrel to $82.98 on May 14. It has further risen to $83.30, indicating more daily hikes would be needed to level retail price with cost.

Oil PSUs, which have been since June last year revising auto fuel prices on a daily basis to reflect changes in the cost, have kept pump rates static since April 24, before finally hiking it on May 13. Oil PSUs have refused to acknowledge if the freeze followed a government diktat so as to help ruling BJP in Karnataka. This despite benchmark international rate for petrol going up from USD 78.84 per barrel, which was used for raising the price to Rs 74.63 a litre on April 24, to USD 82.98 now, according to sources privy to fuel pricing methodology. The benchmark international diesel rates during this period have climbed from USD 84.68 per barrel to USD 88.63.

OneIndia News with PTI inputs