Petrol has yet again seen a hike of Rs. 1.63 per litre. Notably, this is the seventh time, since June, that the price of petrol has been raised. The main reasons that are playing a pivoted role in such repeated hikes are rising oil rates and devaluation in the value of rupee. Not to mention that since last ten months, the auto sector is facing low passenger car sales owing to depreciation of Indian rupee against the US dollar, rising inputs and repeated price hike of petrol. Now, with this surprised check of Rs. 1.63, the things are only going to worsen for auto industry in India. However, to curb and negate such a depressing situation, auto makers are heavily backing their car models that run on diesel. This also reflects on the customers' instinct that is getting inclined towards diesel variants.
The increase herein mentioned does exclude local sales tax or VAT and was effective from midnight on September 14. Just to see how the new rates in major metropolitan cities look like, the new effective prices for Delhi and Mumbai are Rs. 76.06 per litre and Rs. 83.63 per litre, respectively. Notably, with this increase, petrol price has, till date, seen a whooping rise cumulating to a figure of Rs. 10.80 since June month excluding VAT. Delhi alone has seen petrol price surge to Rs. 13.06 per litre including State tax since 1st June 2013.
Earlier, it was expected that oil firms will cut down on the petrol price on September 15th or 16th due to gain in rupee value over past few days. However, much to the disappointment of the common mass and leading auto players, the expected date was deferred to a future unmentioned date. Not only this, the situation further aggrieved as oil firms, taking in consideration the prolonged rupee depreciation against dollar, went ahead to announce yet another price increase on the petrol.
Indian Oil Corporation, tagged as the country's largest oil firm, said that an increase in the price of petrol is impacted by a surge in the international price. Quoting on international export price, the company further said that international price of petrol has increased to $117.40 a barrel from $114.44 a barrel. Furthermore, in August the exchange rate was Rs. 63.88 that deteriorated to Rs. 66.02 a US dollar in September. The company said, “To give effect to these twin reasons, the Corporation is required to increase petrol prices by Rs. 1.63 (excluding VAT) with effect from midnight of September 13-14.” Commenting on the rupee appreciation in the market, IOC further said, “The appreciation in the rupee during the past one week will be passed on to consumers in the next fortnight.”
Notably, customers had to bear a hike of Rs. 0.75, excluding VAT, on June 1. It was followed up by increases of Rs. 2 per litre on June 16, Rs. 1.82 on June 29, Rs. 1.55 on July 15, Rs. 0.7 on August 1 and Rs. 2.35 on September 1. After petrol, prices of other fuels may also be revised in near future. It is being said that price of diesel may see a hike of Rs. 3-5 per litre and kerosene by Rs. 2 a litre. LPG cylinders may also cost Rs. 50 more. With all these intended price hikes, Oil Ministry seems to be solely concerned towards tackling a loss amounting to Rs. 180,000 crore due to rupee devaluation and surging international oil rates.
