Indian Oil hikes petrol, diesel prices for second straight day

Indian Oil hikes petrol, diesel prices for second straight day

Indian Oil hikes petrol, diesel prices for second straight day

Shares of oil marketing companies (OMCs) were mixed on Tuesday even as fuel retailers hiked prices of petrol and diesel for the second day in a row.

Petrol and diesel prices were unchanged for 20-straight days from April 24 to May 13. Chairman Sanjiv Singh had earlier said that his firm had made a decision to "temporarily moderate" prices. The companies are estimated to have incurred loss of about Rs 500 crore as they did not revise the prices despite a spike in worldwide rates and fall in rupee against the USA dollar. After adding excise duty and additional VAT, the price shoots up to around Rs 82.65 (Mumbai) and Rs 77.50 (Kolkata).

The latest increases, set to be two cents a litre for both diesel and unleaded fuel, will be the eighth consecutive week in which the cost of refuelling in Portugal has suffered a price hike. More taxes on petrol and diesel, more burden on the consumer. Recently, Petroleum Minister Dharmendra Pradhan had argued that almost a dozen countries have petrol and diesel prices higher than India. International Olympic Committee has increased the price of petrol by 17 paise and diesel by 21 paise per litre. Heavy dependence on imports, geopolitical uncertainties and cartelization by OPEC nations are some of the reasons why crude oil prices and consequently fuel prices have been on an upward swing in recent months.

The benchmark global diesel rates have since climbed from $84.68 per barrel to $88.63. Indian OMCs disposed of the daily revision in fuel prices that was being carried out from June 2017. The rupee steadily weakening against the dollar only makes matters worse.

"We have chose to temporarily moderate retail prices by not passing on the required increase as we believe the current worldwide oil product prices are not supported by fundamentals".

The price hike now is to compensate for the loss incurred during this period.

Petrol is most expensive in the northeastern town of Mandera and motorists will pay Sh120.98 a litre, or Sh17.1 more than in Mombasa, while diesel will cost 112.45 a litre.

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