"The current increase in the retail price of petrol was necessitated. Based on current price levels in the international oil market, the desired increase in the retai selling prices of petrol in New Delhi market should have been Rs 3.72 per litre," IndianOil Chairman B M Bansal said in a statement.
IOC has chosen to soften the impact 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, Bansal said.
Public sector oil companies yesterday announced a Rs2.50 per litre hike in the price of petrol. Petrol at IndianOil filling stations in Delhi will now cost Rs 58.37 perlitre, up from Rs 55.87 a litre.
This is the second hike in petrol prices in a month as crude oil prices have skyrocketed to USD 92 a barrel in the international market.
He said due to the persistent rising trend in the international oil prices, average prices of the Indian crude basket have gone up from USD 87.83 a barrel during the earlier petrol price revision in December to the current level of USD 92.31/bbl amounting to an increase of USD 4.48 per barrel.
Owing to the substantial increase in oil prices, Oil Marketing Companies are continuing to incur huge amounts of under-realisations on the sales of other petroleum products like diesel, kerosene (PDS) and LPG (Domestic), he said.
"IndianOil is currently incurring an under-realisation of about Rs 159-crore per day on the sales of these three sensitive products," he said.