Ending days of speculation, the Centre on Friday announced an immediate hike in petrol and diesel prices, marking the first revision in retail fuel rates in nearly four years.
The revised rates have come into effect immediately across the country, pushing up pump prices from Friday morning.
The decision comes as global crude oil prices remain elevated and state-run oil marketing companies face mounting financial pressure amid the ongoing West Asia crisis.
With input costs rising sharply and under-recoveries widening, a fuel price correction had increasingly become difficult to avoid.
The impact is already visible across major cities. In Delhi, petrol has become Rs 3.14 costlier per litre and is now retailing at Rs 97.77, while diesel prices have risen by Rs 3.11 per litre to Rs 90.67. Similar increases have been recorded across the country, with final retail prices varying from state to state depending on local taxes and dealer commissions.
For over two months now, India’s oil marketing companies (OMCs) have been losing Rs 1,000 crore a day as crude rates soared, but pump prices remained frozen. Even as India conducted elections in four states and a Union Territory, the attempt might have been not to send across a message of foreboding.
Most countries, including the US and China, have increased motor fuel prices. Closer to home, Pakistan and Bangladesh too raised fuel prices.
India, where the Centre intervenes in petrol and diesel pricing through the OMCs, had kept prices frozen till now. But the Rs 3 hike per litre isn’t going to help the oil companies fully.
Union Petroleum Minister Hardeep Singh Puri had hinted at a price revision earlier this week. “At some stage the government has to take a view on raising prices of petroleum products such as petrol and diesel,” he said at a CII event in the national capital on Tuesday.
Oil companies also raised concerns about facing mounting losses, adding that India was among the few countries to have kept fuel prices stable until now. State-owned firms had held prices steady for 11 weeks despite a sharp rise in input costs, but were eventually forced to pass on part of the burden once operations became financially unsustainable, PTI reported.