New Delhi, Feb. 15: India took one more step towards trimming its bloated subsidy bill by raising the prices of petrol and diesel.
Taking into account local sales tax, petrol price in Calcutta is up Rs 1.87 to Rs 76.59 a litre.
Diesel price in the city is up 53 paise to Rs 52.04 a litre.
“Since (the) last price change, international oil prices have constantly shown an uptrend. Crude oil price has increased to $113.24/barrel from $109.08/barrel, while international MS (motor spirit) prices have increased to $128.57/barrel from $119.59/barrel.
The rupee-dollar exchange rate has, however, improved to 53.43 from 54.78 per dollar during the period.
The corporation has been compelled to pass on the increase in MS prices to consumers as the corporation has already suffered losses on sale of MS so far and trends in international oil market as well as rupee-dollar exchange rate indicate continued strength,” Indian Oil Corporation (IOC) said.
The hike in diesel price is in line with the government’s decision to increase the fuel’s price by about 50 paise per litre every month till losses from selling it below cost are almost wiped out.
The increase in petrol prices, however, can be attributed to the spike in global crude prices. According to the central government’s Petroleum Planning and Analysis Cell, the price of the Indian basket of crude has risen to $114.88 per barrel on February 14 from an average price of $109.95 between January 16 and January 31, an increase of almost $5 per barrel.
Oil firms are allowed to review crude prices and accordingly raise petrol and diesel rates.
Officials said there was no way out for the government but to accept the hike sought by the PSU retailers.
India is 80 per cent dependent on oil imports to run its growing economy and is vulnerable to global price increases.
Oil retailers lose about Rs 450 crore daily by selling diesel, cooking gas (LPG) and kerosene at subsidised rates.