Fuel prices hiked again; may go up by over Rs 20, say analysts

Petrol in Delhi will now cost Rs 97.01 per litre as against Rs 96.21 previously while the diesel rate has gone up from Rs 87.47 per litre to Rs 88.27, according to a price notification of state fuel retailers.

In Mumbai, petrol price has been increased by 85 paise to Rs 111.67 while in Chennai prices went up by 75 paise to Rs 102.91. In Kolkata, rates increased to Rs 106.34 from Rs 105.51. The diesel price hike in Mumbai was 85 paise per litre. Rates differ from state to state depending on the incidence of local taxes. A record 137-day hiatus in rate revision ended on March 22 with an 80 paise per litre increase in rates. Prices had been on a freeze since November 4 ahead of the assembly elections, a period during which the cost of raw material (crude oil) soared by $30 per barrel. The rate revision was expected soon after assembly elections ended on March 10 but it was put off. Oil companies are now recouping the losses. “They will need to raise diesel prices by Rs 13.1-24.9 per litre and Rs 10.6-22.3 a litre on gasoline (petrol) at an underlying crude price of $100-120 per barrel,” Kotak Institutional Equities said in a note. If crude sustains around levels of $120, oil marketing companies will find it difficult to be able to return to a normative marketing margin without any support from the central government in the form of excise duty cuts, it said.