Rising global trend warranted hike: IOC
New Delhi   18-Jan-2011

IndianOil (IOC) has said the current increase in the retail selling price of petrol was warranted and it has softened the impact on the consumer by not passing on the full extent of the rise in global oil prices.

According to an IOC statement, based on current price levels in the international oil market, the desired increase in the retail selling price of petrol in a market like New Delhi should have been Rs 3.72 per litre. However, IndianOil has chosen to soften the impact on the customer by increasing the price by Rs 2.50 per litre only and not passing on the balance required increase of Rs 1.22 per litre.

Even during the previous revision of the price of petrol with effect from 16th December, a month back as against the required increase of Rs 4.90 per litre in the price at New Delhi, the actual increase was confined to Rs 2.96 per litre thus leaving a gap of Rs 1.94 per litre in anticipation of a likely fall in the price levels in the global oil market.

However, IOC says with the persistent rising trend in the international oil prices, average prices of the Indian crude basket have gone up from $87.83 per barrel during the earlier petrol price revision in December to the current level of $92.31 per barrel amounting to an increase of $4.48 per barrel. Average global prices of petrol during the same period have gone through an even higher increase of $5.17 per barrel, rising from a level of $95.30 per barrel to $100.47 per barrel.

Owing to the substantial increase in oil prices, the oil marketing companies (OMCs) are continuing to incur huge amounts of under-realisations on the sales of other sensitive petroleum products, including diesel, kerosene (PDS) and LPG.