Petrol, diesel prices today see biggest hike in 2 months: 5 things to know

In the biggest price hikes since the July Budget, the price of petrol was today increased by 25 paise and that of diesel by 24 paise. The fuel price hike follows a sudden spike in crude oil rates on Monday following drone attacks on Saudi oil infrastructure which wiped off 5% of world's crude oil supplies. A litre of petrol costs ₹72.42 in Delhi, ₹78.10 in Mumbai, ₹75.26 in Chennai and ₹75.14 in Kolkata. Diesel costs ₹65.82 a litre in Delhi, ₹69.04 in Mumbai, ₹69.57 in Chennai and ₹68.23 in Kolkata.

Today's increase is the biggest single-day hike since the July 5 maiden Budget of Finance Minister Nirmala Sitharaman that raised rates by almost ₹2.50 a litre due to an increase in excise duty on fuel.

5 things to know about petrol, diesel prices:

1) State-run fuel retailers take into account international benchmark rates of petrol and diesel, refinery margins and US dollar-rupee exchange rates while fixing the retail price of petrol and diesel. India imports more than 80% of its oil requirements.

2) Brent crude oil futures fell 15 cents, or 0.2%, to $64.40 a barrel by 0253 GMT, after tumbling 6.5% the previous session. U.S. West Texas Intermediate (WTI) crude futures declined 35 cents, or 0.6%, to $58.99 a barrel, after sinking by 5.7% on Tuesday. Crude oil rates had jumped almost 20% on Monday after the drone attacks.

3) Oil minister Dharmendra Pradhan had said yesterday said India is keeping a close watch on the developing situation. "Certainly when there is a spike in prices, it creates anxiety. The events since Saturday (when the Saudi oil facilities were attacked) are a matter of concerns to us," he had said.

4) IANS reported that with three states - Maharashtra, Jharkhand and Haryana - going to the polls next month, the government does not want to risk higher auto fuel prices and face consumer outrage. The report said state-owned oil marketing companies (OMCs) have been told by senior government functionaries to keep the daily price movement of the two petroleum products in check between now and the end of elections.

5) Last October while announcing an excise duty cut on petrol and diesel to tame a spike, the government had also asked OMCs to absorb a Re 1 per litre hike. A Re 1 loss on sale of the two petroleum products for a full year impacts the profits of OMCs adversely with Indian Oil Company (IOC) taking a hit of 19 per cent on its net profit, while Hindustan Petroleum about 27 per cent and Bharat Petroleum about 26 per cent.