New Delhi: The oil firms on Friday decided to increase fuel prices again. While the price of petrol have been increased by Rs 1.50 per litre, that of the diesel have been hiked by 45 paise per litre. The hike was expected this week as the oil firms were slated to begin to exercise the recently accorded freedom to adjust rates in step with cost.
The first hike in petrol price in over three-and-a-half months and the second rise in diesel rates in one month exclude local sales tax or VAT and the increase for consumers at petrol pumps would be higher.
Petrol price in Delhi will go up by Rs 1.80 to Rs 69.06 per litre with effect from Friday midnight after including 19 per cent VAT. Diesel rates would go up by 51 paise to Rs 48.16 a litre.
The increase in auto fuel prices, which come on back of a small hike in diesel price last month, is expected to fuel inflation that stood at three-year low of 6.2 per cent in January. Indian Oil Corporation (IOC), the nation's largest fuel retailer, announced an increase of Rs 1.50 per litre in petrol price as international benchmark oil prices climbed 7.5 per cent.
The diesel rate was raised in line with last month's government decision to allow oil firms to raise prices in small doses every month till over Rs 10 a litre loss on sale of India's most consumed fuel is totally eliminated.
Even after today's increase and a similar hike effected on January 18, oil firms will continue to lose Rs 10.27 a litre on diesel as cost of raw material (crude oil) has risen by 4 per cent to USD 113.24 per barrel.
Rates will vary by a few paise on petrol pumps owned by Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) as state-owned firms maintain differential rates to avoid being accused of acting as a cartel.
(With Additional Inputs from PTI)