Petrol price was on Saturday hiked by a steep Rs 2.35 per litre and diesel by 50 paise ahead of a bigger increase in rates that may also include subsidised LPG planned for next month as the falling rupee has made imports costlier.
The increase in petrol price, the sixth hike in three months, and diesel, eighth since January, are excluding local sales tax or VAT and are effective midnight tonight, oil marketing firms said.
Next month after Parliament session ends, diesel prices may see a one-time hike of Rs 3-5 per litre, kerosene of Rs 2 and LPG of Rs 50 per cylinder as petroleum minister M Veerappa Moily urged Prime Minister Manmohan Singh to take steps to tackle a record Rs 1.8 lakh crore of losses arising from the dipping rupee and surging crude oil rates.
The successive hikes in diesel prices since January to make the fuel market priced, should have wiped out most of the losses on diesel sales by now.
However, the fall in the rupee, around 25 per cent since April, has worsened the situation and oil firms are losing Rs 12.12 per litre despite prices being raised by a cumulative Rs 4.75 this year.
Alongside, oil firms also raised rates of non-subsidised domestic cooking gas (LPG) ó that households buy after exhausting their quota of nine subsidised cylinders. The price increases in the three items would bring down the governmentís subsidy outgo to Rs 50,928 crore.