Petrol and Diesel Prices Unlikely to be Hiked Before Assembly Elections

Strategic Insights -

The Indian government today hinted that petrol and diesel prices are unlikely to be hiked in haste, even though global crude oil prices continue to rule at $110 a barrel. State-run oil companies, Indian Oil Corp, Hindustan Petroleum, and Bharat Petroleum, are currently selling petrol at a discount of about Rs 4.50 a litre to its imported cost, while diesel is sold at a loss of Rs 15.79 a litre or Rs 283 crore per day. Oil Minister S Jaipal Reddy stated that oil companies are watching global markets and will take a studied decision on raising prices.

Key Takeaways:

  • Oil Minister S Jaipal Reddy hinted that petrol and diesel prices may not be hiked before Assembly elections in Assam, Kerala, Puducherry, Tamil Nadu, and West Bengal in May.
  • The three state-run oil companies have lost about Rs 2,000 crore in selling petrol below cost since deregulation in June last year.
  • The three firms have incurred a loss of Rs 432 crore every day on selling diesel, domestic LPG, and kerosene below cost.
  • They are projected to lose Rs 78,061 crore in revenues for the full fiscal at current prices.
  • The price of petrol has not moved in tandem with the international cost since deregulation in June last year.
  • The basket of crude oil that India buys has averaged $110.61 per barrel this month, as against $72-73 a barrel at the time of the last revision in diesel prices in June 2010.
  • Oil companies are losing a record of Rs 24.74 per litre on kerosene and Rs 297.80 per 14.2-kg LPG cylinder.

Statistics:

  • Global crude oil prices continue to rule at $110 a barrel.
  • Local oil companies sell petrol at a discount of about Rs 4.50 a litre to its imported cost.
  • Diesel is sold at a loss of Rs 15.79 a litre or Rs 283 crore per day.
  • The three state-run oil companies have incurred a loss of about Rs 2,000 crore since deregulation in June last year.
  • They are projected to lose Rs 78,061 crore in revenues for the full fiscal at current prices.
  • The basket of crude oil that India buys has averaged $110.61 per barrel this month.

Sources:

  • Indian Express - March 29, 2008
  • Hindustan Times - March 29, 2008