The petrol price on Sunday was increased by 50 paise per liter and diesel by 55 paise, bringing the total tariff increase since the resumption of the daily price review back to Rs 3.70-3.75 per liter in less than a week.
Petrol in Delhi now costs Rs 99.11 per liter instead of Rs 98.61 previously, while diesel prices have risen from Rs 89.87 per liter to Rs 90.42, according to a price report from state fuel retailers.
Rates have been increased across the country and vary from state to state depending on the degree of local taxes.
This is the fifth price hike since the end of a four-and-a-half-month pause in the rate review on March 22. On all previous four occasions, prices had risen by 80 paise per liter – the steepest one-day increase since the introduction of the daily price review in June 2017.
In total, petrol prices have increased by Rs 3.70 per liter in six days and diesel by Rs 3.75.
Prices had been frozen since Nov. 4 in the run-up to parliamentary elections in states like Uttar Pradesh and Punjab — a period when raw material costs (crude oil) rose by about $30 a barrel.
Congress and other opposition parties have criticized the government for the price hike, saying it has increased the burden on the common man, who is reeling under the general rise in commodity prices.
The increase in the retail price due to the rise in the price of crude oil during the 137-day hiatus from about $82 a barrel to $120 is huge, but the state-owned Indian Oil Corporation (IOC) fuel retailers Bharat Petroleum Corporation Ltd. (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) will pass on the required increase in phases.
Moody’s Investors Services said last week that state retailers have collectively lost about $2.25 billion (Rs 19,000 crore) in revenue from holding down gasoline and diesel prices during the election period.
According to Kotak Institutional Equities, “Oil companies will have to increase diesel prices by 13.1-24.9 rupees per liter and 10.6-22.3 rupees for gasoline (gasoline) at an underlying crude price of 100-120 dollars per barrel.
CRISIL Research said an increase in sales price of 9-12 rupees per liter would be necessary for a full pass through of an average of $100 per barrel of crude oil and 15-20 rupees per liter if the average price of crude oil rises to $110. -120.
India is 85 percent dependent on imports to meet its oil needs and therefore retail tariffs are adjusting to the global movement.