Oil firms plan to hike petrol prices by Rs 8 per litre

Monday, May 14, 2012: State oil firms plan to raise petrol prices after the end of the budget session of Parliament this month and revise them every fortnight to recover 5,000 crore past revenue losses as they haven’t increased rates since December due to political pressure.
So far, the oil ministry has not allowed oil firms to exercise their freedom to raise petrol prices as per a Cabinet decision. The ministry informally advises companies to postpone the decision because of political considerations.
Senior executives at Indian Oil, Hindustan Petroleum and Bharat Petroleum say the companies want to align pump prices of petrol with market rates by an immediate hike of 7 per litre and also recover part of five-month old dues by an additional hike of at least 1 a litre.
If petrol prices are raised by 8 a litre, the net impact after taxes would raise the price in Delhi by about 9.6 per litre. The fuel is currently sold at 65.64 per litre in New Delhi.
“The government is not willing to compensate us for our losses on petrol as it is a deregulated fuel. We can’t absorb the losses in our accounts. We have to pass it to consumers in small installments,” chairman of an oil company said, requesting anonymity.
But oil ministry officials do not rule out political interference again this time to stop a steep price hike, especially in the light of forthcoming presidential elections. “Oil PSUs’ demand is legitimate.