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Petroleum industry

Indian Oil Corporation Announces Fuel Price Hike

Strategic Insights

— 1 min read

The country's largest fuel retailer, Indian Oil Corporation (IOC), has announced a fuel price hike effective midnight tonight, citing international crude oil price fluctuations and a depreciating rupee-dollar exchange rate. The price increase of 75 paise per litre for petrol and 50 paise per litre for diesel is exclusive of local taxes and levies. This marks the first fuel price hike of the current calendar year.

Key Takeaways:

  • The fuel price hike of 75 paise per litre for petrol and 50 paise per litre for diesel is effective from midnight tonight, as announced by Indian Oil Corporation.
  • The price increase is due to a rise in international crude oil prices from $115 per barrel to $116.6 per barrel, as well as a depreciation in the rupee-dollar exchange rate from Rs61.88 per dollar to Rs62.00 per dollar.
  • The IOC has authorized oil marketing companies (OMCs) to increase the retail selling price of diesel within a small range every month until further orders, as per a government order dated 17 January 2013.
  • Despite the price hike, the IOC is expected to incur an under-recovery of Rs9.24 per litre of diesel, totalling Rs74,700 crore for the year 2013-14, while the three PSU oil marketing companies stand to lose a total of Rs1,44,800 crore in subsidized sales.
  • The company also expects to incur losses of Rs37.33 per litre in the sale of PDS kerosene and Rs762.50 per cylinder of LPG for domestic consumption.

Statistics:

  • International crude oil price has increased from $115 per barrel to $116.6 per barrel.
  • The rupee-dollar exchange rate has depreciated from Rs61.88 per dollar to Rs62.00 per dollar.
  • IOC is expected to incur an under-recovery of Rs9.24 per litre of diesel in the year 2013-14.
  • The three PSU oil marketing companies stand to lose a total of Rs1,44,800 crore in subsidized sales.
  • IOC is expected to incur losses of Rs37.33 per litre in the sale of PDS kerosene and Rs762.50 per cylinder of LPG for domestic consumption.

Sources:

  • Indian Oil Corporation (IOC) release, citing government order dated 17 January 2013.
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