New Delhi: A day after the winter session of Parliament ended, state-run Bharat Petroleum Corp. Ltd (BPCL) increased petrol prices by Rs2.95 per litre, making it the fifth hike this year.
Other government-owned oil marketing companies such as Indian Oil Corp. Ltd (IOC) and Hindustan Petroleum Corp. Ltd (HPCL) are expected to follow suit.
Effective midnight Tuesday, the price of petrol, which was freed from state control in June, will be available at Rs55.87 per litre at BPCL outlets in Delhi. BPCL has 8,500 outlets in the country and retail prices will vary on local taxes.
Retail effect: A file photo of a BPCL fuel station in New Delhi.
“We have been losing money on petrol sales on account of increase in international crude oil prices,” said director, finance, S.K. Joshi. “Even after this price increase, the under-recoveries will be in the order of Rs1.50 per litre.”
While this increase will cut the growing subsidy bill partly borne by state-owned oil marketers, it will arm the opposition against the Congress-led government, which is already on the back foot on corruption allegations.
IOC, BPCL and HPCL operate almost 95% of the retail outlets in the country.
“We plan to increase the prices shortly,” a HPCL executive said, requesting anonymity.
India is planning to increase retail prices of diesel by Rs2 a litre and an empowered group of ministers headed by finance minister Pranab Mukherjee is expected to meet on 22 December to take the decision.
“We are trying to ensure that the price hike is minimal,” petroleum minister Murli Deora told reporters on Tuesday.
The import price of the Indian crude basket—a mix of crude varieties—rose to $89.34 (Rs4,020.3) per barrel on Monday. The government expects the cost of selling fuel below cost in the current fiscal year to be around Rs65,000 crore, with state-owned sellers losing Rs4.17 a litre on petrol and Rs5.40 a litre on diesel.