Petrol likely to cost a rupee more from Jan 1

With the rupee weakening against the dollar, oil companies have proposed increasing the price of this auto fuel by about Rs1 per litre from January 1. HT reports.

With the rupee weakening against the dollar, oil companies have proposed increasing the price of this auto fuel by about Rs1 per litre from January 1.

HT Image

Sources, however, said the move needs clearance from the government as it comes ahead of assembly elections in five states, including Uttar Pradesh and Punjab.

“The weakening of the rupee against the dollar has made oil imports costlier. There is an under-recovery of about 85 paise per litre currently. After adding local sales tax, the desired increase in retail prices would be Rs1.02 per litre,” a top executive of a state-owned oil company told HT on condition of anonymity.

“While we (oil companies) are free to revise the price of petrol, there is an unwritten rule that the final decision vests with the government. An informal nod is required from the petroleum ministry, which is our majority shareholder,” he said.

State-owned oil marketing firms — Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation — use the fortnightly average of the benchmark oil price and exchange rate to revise retail rates on the 1st and 16th every month.