Fuel Prices Hiked After Pre-Karnataka Poll Freeze Of 19 Days
Retail prices of petrol and diesel were raised today for the first time since April 24 after a pre-Karnataka poll freeze by oil marketing companies.
Petrol prices went up by Rs 0.17 a litre in Delhi and Mumbai, while diesel rates were increased by Rs 0.21 and Rs 0.23, respectively, in the two metropolitan cities, according to the Indian Oil Corporation Ltd.’s website. The petrol price now stands at Rs 74.80 and Rs 82.65 a litre in Delhi and Mumbai, respectively, while the diesel is at Rs 66.14 and Rs 70.43. The revised rates were applicable from 6 a.m. today.
The hike, a first in 19 days, comes after polling for the Karnataka assembly concluded on Saturday. Oil marketing companies, which have been since June last year revising auto fuel prices on a daily basis to reflect changes in the crude cost, kept pump rates static since April 24.
While crude oil slipped last week, as investors deliberated the supply impact of the U.S. sanctions on Iran, it failed to provide relief to consumers in India. Diesel remains the most expensive fuel in Asia’s third-largest economy and petrol prices continue to hover around record levels in various cities.
Crude’s recent rally, driven by deepening regional conflict in the Middle East and U.S. President Donald Trump’s curb on Iranian crude, has become a major hassle for Indian retailers, who were asked to not increase fuel prices and absorb losses up to Re 1 per litre, according to a Bloomberg report.
Also read: How Elections Hurt Oil Marketing Companies
Since India imports almost two-third of its crude oil needs, the rally continues to inflate the import bill, while rupee depreciates. Since April 24, Brent crude has rallied 3.85 percent to $76.7 per barrel, while rupee has weakened 1.32 percent against the U.S. dollar to Rs 67.3.
Oil Minister Dharmendra Pradhan, in an interview with Bloomberg, resonated with the view that surging gasoline and diesel prices are pinching Indian consumers. The government, on its part, has been constantly demanding for a special price mechanism for large oil importers such as India from their ‘Gulf allies’, he added.
We have constantly discussed this issue with our counterparts across globe as to why should India pay a premium when we are the biggest consumer...we have asked gulf allies to consider a special price mechanism for large oil consumers like us.Dharmendra Pradhan, Minister of Petroleum & Natural Gas
Shares of IOC rose as much as 2.7 percent to Rs 173.7 on the NSE today post the rate hike.