Petrol prices rise by Rs 3.14 per litre!

Fuel price rise

Petrol prices are on the boil yet again. This time the Government of India has introduced a hike in petrol prices by Rs 3.14-3.32 per litre with effect from midnight. Many fear, that LPG prices too might go up. Although, no such announcement of subsidies on LPG being removed has been made as of yet. A group of Ministers headed by the Finance Minister, Pranab Mukherjee will meet tomorrow and limiting supply of subsidised LPG cylinders to 4-6 per household in a year will be on agenda.

The new hike comes as most households were barely coming to terms with a similar hike just four months back. The current price of crude oil stands at $110-111 per barrel while the price which we are paying for petrol at the moment corresponds to about $103 per barrel. IOC, BPCL and HPCL lost Rs 2,450 crore this fiscal on selling petrol below the cost.

“We were losing Rs 2.61 per litre or Rs 15 crore per day on sale of petrol. After adding sales tax or VAT, the hike needed to level domestic rates with international prices came to Rs 3.14 per litre in Delhi,” an official said.

The fuel in Mumbai will cost Rs 3.29 a litre more at Rs 71.28 per litre, while in Chennai the price have been increased by Rs 3.32 to Rs 70.82 per litre. It was the petrol price rise that led to the demand for diesel cars to rise. If this continues, the future of petrol powered mobility in India isn’t looking too bright. The demand for diesel cars is going to rise further and automakers will have a hard time trying to meet the sudden rise in demand.

Via The Hindustan Times