Following the diving nature of Indian Rupee in the past few months Petroleum Minister, S Jaipal Reddy had recommended last week an immediate need to raise fuel prices by Rs 8 but refused to comment on when the hike will actually take place.
However, following today's depreciation of the Indian Rupee to an all-time new low to Rs 56.0042 to 1 USD, the oil companies across the country have hike the petrol price by a an upsetting Rs 6.28 per litre excluding local sales tax or VAT. The hike translates into a total hike of Rs 7.50 per litre. The revised prices will be put into effect, starting from Wednesday midnight.
The government had decontrolled petrol price in June 2010 but rates were last increased on November 4 last year. This despite oil price rising by 14 per cent and 7 per cent fall in value of rupee against the US dollar. Price of diesel, kerosene and cooking gas were raised in June last year.
"If rupee depreciates by one against the US dollar, our oil companies lose Rs 8,000 crore (annually)," Reddy said. "Rupee dipped (to an all-time low of) Rs 55 (to a US dollar). Last year it was Rs 46. This translates into a loss of Rs 72,000 crore (on account of rupee depreciation) this year."
"Seeing all this, something needs to be done, but when will it be done, how it will be done... I cannot make a forecast," Reddy had said.
State-owned oil firms, who had in the fiscal ending March 31, 2012 lost Rs 4,860 crore on petrol sales, are currently losing Rs 6.28 per litre on petrol. After including 20 per cent VAT, the desired increase in petrol price in Delhi comes to Rs 7.53 a litre.
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