Consumers could brace for a price increase in petrol by the end of this week as fuel retailers IOC, HPCL and BPCL have started incurring a loss of close to 90 paise a litre on petrol on account of higher gasoline prices in world markets and a depreciation in rupee against the dollar in the current fortnight. Retailers are in the process of ascertaining the actual quantum of price increase to be effected.
The price of petrol has gone up in overseas markets by about $4 a barrel in the first 12 days of this month, while the rupee lost 64 paise against the dollar in the same period, making imports even more costly. The domestic price of the decontrolled fuel is bench marked against the cost of the fuel had it been imported. Price movements and exchange rate fluctuations in the first fortnight of the month determines the the fuel?s local price for the next 15 days.
Companies were able to cut petrol price by 65 paise excluding taxes on December 1 when petrol price eased from $116 a barrel to $109 despite the rupee losing some ground against the dollar to R51.5.
However, petrol price in overseas markets that is relevant for India–the average FOB Singapore 95 RON gasoline cargo price?was $113.10 a barrel in the first 12 days of December, informed Platts, a leading global energy information provider.
Retailers are incurring huge losses on other fuels such as diesel, kerosene and LPG, adding up to a daily loss of R393 crore a day. They now sell diesel at a loss of R12 a litre, kerosene at a loss of R28 a litre and LPG at a loss of R287 per cylinder.
Companies are expected to report a total loss of R1,37,000 crore at the end of this fiscal, of which a substantial part has to be compensated by the government.