NEW DELHI: State-run retailers on Tuesday lifted the tacit freeze on fuel rates after 139 days by increasing petrol and diesel prices by 80 paise a litre after the assembly election process in five states including Uttar Pradesh ended this month. The increase comes amid surging oil prices in the international market, which soared to 40% at around $115 a barrel on Monday.
Public sector companies have also raised cooking gas rates by ₹50 a cylinder to ₹949.50 per 14.2 kg refill used in households. The practice of aligning petrol and diesel rates daily and cooking gas every fortnight was suspended because of unsaid political reasons, two government officials and three executives working in public sector oil firms said, requesting anonymity.
After the increase on Tuesday, petrol in Delhi was being sold at ₹96.21 per litre and diesel at ₹87.47 a litre. Petrol and diesel rates were frozen since November 3, a day before the Union government slashed central excuse on petrol by ₹5 a litre and diesel by ₹10 to provide relief to the consumers. Many states also followed the suit by reducing value-added tax. The cooking gas price was last revised on October 6.
“The decision to start raising fuel rates was also taken to protect private fuel retailers – Shell, Nayara Energy and Reliance-BP – as they were on the verge of shutting down their pumps because dominant public sector players continued selling auto fuels at huge revenue losses,” one of the people cited above said.
{{/usCountry}}“The decision to start raising fuel rates was also taken to protect private fuel retailers – Shell, Nayara Energy and Reliance-BP – as they were on the verge of shutting down their pumps because dominant public sector players continued selling auto fuels at huge revenue losses,” one of the people cited above said.
{{/usCountry}}State-run companies Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd enjoy monopoly as they control almost 90% of the Indian fuel market.
Oil company executives cited above said the 80 paise a litre price increase is “too late and too little” as revenue losses before the current hike were about ₹12 per litre and ₹24 a litre.
“Revenue loss does not mean actual loss. Public sector companies have not been set up with the profit motive. They also serve the people and keeping fuel prices under check is part of the government’s energy security strategy,” one of the officials said. He cited the unprecedented geopolitical situation affecting global economies because of the Russia-Ukraine war.
Russia is one of the largest energy exporters. The sanctions on Russia have adversely affected the global supply chain of essential commodities such as cooking oil, wheat and fertilisers.
International oil prices are surging unabated due to the ongoing war in Ukraine. Benchmark Brent crude, which closed at $115.62 a barrel on Monday, opened high the next day. It was 2.61% up at $118.64 a barrel on Tuesday 11 am India time.