New Delhi, Jan. 2: The prices of petrol and diesel were raised tonight by a little over Re 1 a litre across the country.
The hike was spurred by the surge in crude oil prices to over $30 a barrel after the US started moving desert-trained troops to the Gulf in preparation for a military strike against Iraq.
The price of petrol in Calcutta has been raised by Rs 1.02 to Rs 31.44 a litre, and diesel by Rs 1.02 to Rs 20.45 a litre.
In Delhi, petrol will cost Rs 29.93 a litre against the prevailing Rs 28.91 while the price of diesel has been increased from Rs 18.06 a litre to Rs 19.07.
The hike in the prices comes after the November revision, when state-owned oil companies ratcheted down prices by Rs 1.50 a litre in two instalments after crude oil prices had eased.
In Mumbai, a litre of petrol will now cost Rs 34.73 opposed to the prevailing Rs 33.63. The price of diesel has been raised by Rs 1.21 to Rs 24.24 a litre.
Last April, the government had dismantled the administered pricing mechanism under which it orchestrated price revisions. Ever since, oil companies have met every fortnight to review global prices and decide on revising petrol and diesel prices.
The officials of Indian Oil Corporation, IBP, Bharat Petroleum and Hindustan Petroleum today met to match retail prices of motor spirit (petrol) and high-speed diesel with the import parity price.
Oil companies are now free to decide petrol and diesel retail prices but need to reset these on the 1st and 16th of every month.
The average procurement cost of the Indian basket of crude oil was $27.04 a barrel in December, opposed to $23.90 a barrel in the second half of November.
The cost increased to $28.13 a barrel in the second half of December, based on which today’s price revision was done. The Indian basket of crude had averaged $23.72 a barrel in the first fortnight of November. The November average procurement price came to $23.60 a barrel.
Ethanol-blended petrol — which would soon be sold nationwide after its launch yesterday in Mumbai — will cost 15-20 paise a litre less than conventional petrol after a 30-paise a litre relief in excise duty. This variant of petrol is currently sold in Maharashtra, Andhra Pradesh, Uttar Pradesh and Punjab.
“The finance ministry has notified that additional excise duty on petrol has been reduced from the normal rate of Rs 6 a litre to Rs 5.70 a litre for petrol to be sold after blending with ethanol,” petroleum minister Ram Naik said.