Come Jan 1st and there might be a shocker of a news awaiting petrol car owners. According to The Economic Times, the state-run oil companies are planning to raise the petrol prices to the tune of Rs 2.25 a litre from Sunday unless the government asks them not to do so.
The report which was carried today in The Economic Times speculated the price raise move of the state run oil companies as the oil companies revise petrol prices every two weeks but in the middle of this month, the government told state firms to refrain from any increase as the move could cause uproar during the winter session of Parliament. As a result, the price rise would be relatively steeper as oil firms need to make up for the losses, according to oil company executives.
As per the report, it was stated that companies’ executives say that compared to the landed price of imported petrol, domestic rates need to be raised by Rs 1.90 per litre, excluding local taxes. If the entire loss is passed on to the consumer, with 20 percent state duties, the fuel will be costlier by 2.28 a litre in the Capital. The state tax varies from state to state. While a decision will be taken on the same on Saturday, the government might not give a green signal to the price raise citing assembly elections being declared in five states which might dent the popularity of the government. Assembly elections will be held in Uttar Pradesh, Punjab, Uttarakhand, Goa and Manipur between January 28 and March 3.
But the officials from the petroleum ministry claim that they do not have a say in it and say that the oil companies were free to charge market rates for petrol and they should not hesitate in exercising their pricing freedom. It must be recalled that the government allowed state oil firms to align petrol price with international rates on June last year, but companies always informally consulted it before taking any pricing decisions.
The report also mentioned that until November, domestic petrol rates were cut or raised whenever it seemed politically acceptable. Subsequently, oil companies have systematically revised prices every two weeks, except for the fortnight ended December 15. “Had oil firms not deferred the price revision, petrol would have become costlier by 1.02 per litre,” executives said.
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum raised domestic retail prices of petrol by Rs 1.80 a litre on Nov 4 in Delhi. They cut the price by Rs 2.22 per litre and Rs 0.78 a litre in the following two fortnights, according to the reports.