Petrol Price Kicks Off Upward Move, Hike by 82 Paise, 61 Paise from Midnight
Halting almost a 6-month trend of declining petrol and diesel prices, the oil companies have reversed the price cut by increasing the petrol price for the first time since August.
Today’s hike announced amount to 82 paise per litre and diesel by 61 paise, and it is effective from midnight today, February 16, 2015.
Though the price was lower in the international market, government partially passed on the benefit to consumers in India by increasing the excise duty four times since November to Rs. 7.75 on petrol and Rs. 7.50 on diesel.
Now the petrol price will be Rs.56.49 and diesel would cost Rs. 46.62 in Delhi, while in southern states ti would be much higher owing to steep taxation in state taxes.
Last time the oil prices were changed was on February 4 by Rs 2.42 per litre and Rs 2.25 per litre respectively but in less than 10 days the hike was partially offset with today’s announcement of the hike.
Ironic but the price hike on February 4 came when the international crude price was actually on its upward movement, with no rationale but the Delhi elections on Feb 7. In less than a week after the election results, the actual move to factor in the international price hike began to surface.
Defending the hike, however, Indian Oil corporation said that there has been a steep increase in international prices and the Rupee-US Dollar exchange rate, which caused the latest hike in domestic oil prices.
“The combined impact of both these factors warrants increase in Retail Selling Prices of both Petrol and Diesel. The movement of prices in international oil market and INR-USD exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes,” said IOC, India’s largest oil retailer, in a statement.
In fact, crude oil prices have been climing for three weeks with Light Brent crude, which had been below $60 a barrell till December 24, rose by $2.24 or 3.8% more to settle at $61.52 a barrel this year.
The rise in global oil price is also partially due to decline in the number of active US oil rigs by 98 to 1,358, almost 406 rigs less than Year-on-Year figure.
Some analysts said the OPEC is not likely to reduce its output, forcing the US and Canada to fall in line by reducing the output so that the market would stablize.