New Delhi, June 30: Petrol prices were today hiked by Rs 1.69 a litre and diesel 50 paise a litre as the crisis in Iraq caused a spike in global crude rates.
The hike, effective midnight tonight, excludes local sales tax or VAT and the actual increase will be higher, varying from city to city.
In Calcutta, petrol will cost Rs 81.43 per litre, an increase of Rs 2.01 per litre. Diesel prices will go up 67 paise to Rs 62.64 a litre.
“Due to the geo-political unrest in West Asia, there has been significant increase in international oil prices during the past two weeks. The international prices of petrol have increased more than $4 per barrel, and the rupee-dollar exchange rate has also deteriorated. The combined impact of both these factors has warranted an increase in petrol prices by Rs 1.69 a litre (excluding state levies),” Indian Oil Corporation said in a statement.
This is the first increase in petrol prices since the Modi government took office.
Earlier, in April, the government cut the prices of petrol by 70 paise per litre as the appreciation of the rupee against the dollar made oil imports cheaper.
The UPA government had also barred oil companies from increasing fuel prices as it was wary of unpopular decisions before the elections.
The Modi government had raised diesel prices by 50 paise on May 31, following the previous regime’s policy of increasing prices in small doses every month to eliminate subsidy.
“Even after the current increase, under-recovery on retail diesel shall stand at Rs 3.40 a litre,” IOC said.
Despite the increase, state-owned refiners continue to suffer under-recoveries of Rs 33.07 a litre on the sale of kerosene and Rs 449 a cylinder on domestic cooking gas.
Cooking fuels LPG and kerosene continue to be controlled.
For 2014-15, refiners are expected to incur under-recovery of around Rs 107,850 crore for selling kerosene, LPG and diesel below market prices.