Petrol price crosses Rs 80 mark in Kerala, brace for further rise

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Petrol price crosses Rs 80 mark in Kerala, brace for further rise

Posted on : Saturday 19th of May 2018

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New Delhi/Thiruvananthapuram: In line with the price hike announced earlier, the cost of petrol and diesel across India has been hiked by 32 paise and 24 paise, respectively. The petrol price touched Rs 80.01 per litre on Saturday in Thiruvananthapuram, while diesel price has gone up to Rs 73.06.

Fuel prices, which were not revised apparently on account of the Karnataka polls, are now being revised on a daily basis as is the practice. It is estimated that public sector oil marketing companies suffered a loss of about Rs 500 crore as the prices were left unchanged for 19 days since April 25.

As per the Indian Oil Corporation website, prices of non-branded petrol have been revised to Rs 75.61 per litre in Delhi, Rs 76.83 per litre in Bengaluru, Rs 78.29 per litre in Kolkata, Rs 83.45 per litre in Mumbai and Rs 78.46 per litre in Chennai.

Diesel prices across India have been revised to Rs 67.08 per litre in Delhi, Rs 68.23 per litre in Bengaluru, Rs 69.63 per litre in Kolkata, Rs 71.42 per litre in Mumbai, Rs 70.80 per litre in Chennai.

As per reports, the hike in prices comes in the backdrop of increase in global crude oil prices, which are reportedly estimated to touch $100 for one barrel.

In April, Union petroleum minister Dharmendra Pradhan said the Centre and the state governments have been considering bringing the petroleum products under the ambit of the Goods and Services Tax (GST).

Rs 4 hike likely soon

Meanwhile, brokerage firms said that around Rs 4 per litre increase in petrol and diesel prices is in the offing if state-owned fuel retailers are to return to margin levels that existed prior to the Karnataka poll.

No sooner had Karnataka polled to elect a new state government, state-owned Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) ended a 19-day hiatus in revising petrol and diesel prices and reverted to the practices of changing rates on a daily basis.

"Our computation suggests that downstream oil marketing companies (OMCs) are required to increase retail prices of diesel by a steep Rs 3.5-4 a litre and gasoline (petrol) by Rs 4-4.55 per litre in the coming weeks to earn normative gross marketing margins of Rs 2.7/litre," Kotak Institutional Equities said in a report.

The increase is based on assumption that global price of diesel and petrol and Rupee-US Dollar exchange rate remain stable hereon.

"We note that the lack of price hikes over the past three weeks, before Karnataka elections amid a sharp increase in global crude/product prices, has resulted in sharp moderation in gross marketing margins to around Rs 0.5-0.7 a liter," it said.

Last week, ICICI Securities had said that auto fuel net marketing margins were weak at Rs 0.31 a litre as prices were not hiked after April 24.

OMCs returned to daily price revision from May 14. They are estimated to have lost about Rs 500 crore on absorbing higher cost resulting from the spike in international oil rates and fall in rupee against the US dollar.

The benchmark international rate for petrol, used for revising rate on April 24, had gone up from $78.84 per barrel to $82.98 on May 14. It has further risen to $83.30, indicating more daily hikes would be needed to level retail price with cost.

Similarly, benchmark international diesel rates during this period have climbed from $84.68 per barrel to $88.93. Also, the rupee has weakened to Rs 67.06 per US dollar from Rs 66.62, making imports costlier.

Courtesy : Manorama

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