[Vikonbarius]

Consumers should brace for yet another petrol price hike as state-owned oil marketing companies are looking at the possibility of increasing petrol prices at least by Rs.1.82 per litre. This will be the second hike in petrol prices in as many months.

“From today, we are losing about Rs.1.50 per litre on petrol and to cover it up — because sales taxes have to be taken in — the price hike should be of the order of Rs.1.82 per litre,” said Mr B. Mukherjee, director (finance) at HPCL.
He said that the company is talking with other PSUs on raising prices. “Let’s say, we are toying with the idea,” he added.

It was in September that the oil companies had hiked petrol prices by around `3.14 per litre to offset their losses on the product due to weakening of the rupee against the dollar.

Petrol prices have been hiked thrice this year and nine times since petrol prices were decontrolled in June 2010.

Also in June this year, the government had hiked the prices of diesel by Rs.3 a litre, kerosene Rs.2 a litre and LPG by Rs.50 a cylinder.

At the current exchange rate, the petrol price of Rs.66.84 per litre in Delhi corresponds to about $102 per barrel equivalent of crude oil even as it is hovering at around $108 per barrel in international markets.

After its biggest monthly gain on Monday, crude oil fell more than $3 per barrel to $106.80 on Tuesday after a decision by Greece to call a referendum over its debt bailout threw the euro zone into crisis.

Besides petrol, the oil marketing companies are losing Rs.333 crore per day on selling diesel, domestic LPG and kerosene below cost.

During the April to September period, the loss on these three product was Rs.65,000 crore. The government is losing Rs.8.58 on the sale of every litre of diesel, Rs.26.94 per litre on kerosene and Rs.282 on an LPG cylinder. While the loss on these three products are compensated through a combination of government cash subsidy and upstream oil firm dole outs, no such mechanism exists for making good the losses on petrol as the product is deregulated.

Though petrol prices were deregulated in June 2010, oil companies still informally take nod from the government before increasing the prices.

The government has been allowing the oil companies to hike petrol prices because its overall impact on the inflation is low as compared to diesel.

Another reason is for allowing the oil companies to hike petrol price is because of budgetary support provided by the government for oil subsidies and the subsidy for petrol will increase the financial burden and make it difficult for the finance ministry to meet the deficit target of 4.6 per cent.

- dc chn

[IodinkBoilk]

which means again cut to pocket this is bad i was thinking to purchase a bike