Despite hike, oil retailers to lose ₹5.71/litre

Diesel prices were today hiked by ₹1.09 a litre, excluding State levies.

The monthly increases in diesel rates, which had been put on hold just before the elections started, were back soon after polling ended today.

The hikes, effective from midnight tonight, are excluding State sales tax or VAT and actual increase will be higher and will vary from city to city, the oil companies announced.

Diesel price in Delhi will be hiked by ₹1.22 a litre after including taxes, to ₹56.71 per litre, while it will cost ₹65.21 a litre in Mumbai as against ₹63.86 at present.

State-owned oil companies, which had last hiked diesel price on March 1, will lose ₹5.71 a litre even after today’s hike.

The Cabinet had in January last year decided that diesel prices should be raised by 40-50 paise a litre every month until losses on the fuel are wiped out. However, oil firms skipped the hikes due on April 1 and May 1 as the UPA Government did not want to take the unpopular decision during the elections.

Before today’s increase, diesel prices had risen by a cumulative ₹8.33 a litre in 14 instalments since January 2013.

There will be no change in petrol rates even though the oil firms were losing about 50 paise a litre due to depreciation in value of rupee against the US dollar.

Oil PSUs IOC, BPCL and HPCL had on April 1 skipped raising diesel rates as per the January 2013 decision of the Cabinet of small monthly raises, on the plea that revenue losses on the fuel have dropped below ₹6 a litre.

They again did not raise rates on May 1 even though the losses had climbed to ₹6.80 per litre.

(This article was published on May 12, 2014)
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