Oil companies in India have again increased the prices of petrol by Rs. 2 per litre, owing to the steep fall in the value of rupee against the strong US dollar. This hike, which was implemented from midnight June 16, is exclusive of VAT or local sales tax. Following this, the prices of petrol in national capital increased by Rs. 2.4 per litre, taking the final amount to Rs. 66.39 from the earlier Rs. 63.99.
It must be noted that this is the second increase in the petrol prices during the month of June 2013 as the oil companies imposed a hike by Rs. 0.75 on June 1, excluding tax. Unlike the last time, the diesel prices have remained same. In Mumbai, the petrol prices are increased by Rs. 2.52, taking the final amount to Rs. 74.6, while in Chennai, the rates hiked by Rs. 2.54 to Rs. 69.39. Expressing its views on this increase, the Indian Oil corporation said, “Since last price change, the slide in Rupee (against the US dollar) has continued and the dollar-rupee exchange rate has deteriorated from Rs. 55.32 to Rs. 57.08 per dollar. The combined impact of both these factors, mainly depreciation of the rupee, has warranted the increase in petrol prices by Rs. 2 per litre (excluding VAT),”
Reportedly, the hike in fuel prices on June 1 were the first in the last three months. Prior to this, the increase was announced on March 1, which was followed by the four times cut in fuel prices owing to the fall in global oil prices. Interestingly, since January 2013, the diesel prices have been increased five times, when the central government authorised the state owned oil companies to raise the prices by up to Rs. 0.5 per litre every month till the entire subsidy is wiped out.
The subsidy on diesel in India has widened up to Rs. 6.31 per litre from Rs. 4.87 at the beginning of June 2013. On this, the Indian Oil Corporation said that at current rate, the company is expected to end the ongoing fiscal with a revenue loss of around Rs. 60,000 crore. Considering the total loss of this industry, auto analysts are anticipating a figure of around Rs. 112,500 crore in their total revenue. The statement further said, “The movement in international oil markets and dollar-rupee exchange rate has been put on a close watch and developing trends will be reflected in future price changes.”
