December 14th, 2011
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Petrol price hike expected

petrol-priceNew Delhi: State-owned oil firms are seeking permission to hike petrol prices by Rs 0.65 per litre this week. If approved the price may rise this Friday. The falling rupee to an all-time low of Rs53.75 per dollar is the cause for increase in the cost of oil imported by the state refiners, industry sources said. International rates of gasoline against which domestic petrol prices are benchmarked have also increased.

“We are yet to calculate the exact impact of the falling rupee but it is likely that consumer prices of petrol may be hiked by between 50 paise and R1 a litre,” a senior OMC executive said. Petroleum ministry officials said the weakening of rupee has added Rs 50,000 crore to the fuel subsidy. “Every time the rupee depreciates by one rupee against the US dollar, Rs 8,000 crore is added to the fuel subsidy bill…as the rupee has depreciated from R46 to a dollar to R52, this has added Rs 50,000 crore (to the subsidy),” a senior petroleum ministry official said.

Public sector oil firms, which revise petrol prices on the 1st and 16th of every month, based on the average international rates of the previous fortnight, may informally consult the parent Petroleum Ministry, before taking a decision.



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