The buzz around the presidential elections and the appointment of Pranab Mukherjee as the 13th president of the nation has not even phased out yet and here comes a bazooka from the government in the form of a 70 paise hike in the prices of petrol. The newly appointed President and the former senior leader of the Indian National Congress has made quite an entry as the new President. The hike, which came into effect since the midnight of July 23, 2012, has reportedly been levied owing to the rise in global oil prices and the fall in the value of the Indian rupee. The Government of India had deregulated the fuel prices back in 2010, giving complete freedom to the Oil Manufacturing Companies (OMCs) to price the fuel as per their will.
Commenting on the issue, Indian Oil Corporation stated, “It has been decided by Indian Oil Corporation to increase Motor Spirit (MS) prices by Rs.0.70 per litre (excluding state levies) with effect from midnight of July 23.” Clarifying further, the company stated that the latest price revision has been a mandatory one considering that the global oil prices have been on a constant rise and the fluctuations in the FOREX rate just don't seem to stop. For the relevant pricing period, an Indian basket of crude oil costs approximately USD 101.28 for every barrel, whereas the international price happens to be USD 111.59 per barrel. On the other hand, the value of Indian rupee against Dollar happens to be Rs. 55.36 as of now. In the light of these facts, the IOC has been ramping up losses at the rate of Rs. 1.41 for every litre of petrol sold in the country.
Considering the volatility in price movement, IOC has decided to bring into effect the hike of Rs. 0.70 per litre for now and will keep a watch on the dynamics for sometime before taking further action at the right time. The High-speed diesel (HSD), Kerosene and LPG prices too have not been revised since June, 2011. This has caused additional losses for the company with under-recovery of Rs. 10.01 on every litre of diesel, Rs. 27.20 per litre of kerosene and Rs. 319 on every cylinder of LPG sold.
Across the country, the latest hike will vary between Rs. 0.70 to Rs. 0.91 depending upon the taxes levied by different states. This recent revision comes in the series of price hikes of petrol that have struck the automotive industry, with the last hike being the record high. The news is bound to bring creases on the foreheads of the car makers who have not yet shifted to the production of diesel cars and have been trying to lure customers through attractive discounts and offers.
