New Delhi, March 31: The government is raising the prices of petrol and diesel by over one percent in 13 cities, where the Euro-IV grade low-sulphur fuel will be supplied from April 1.
“Bharat Stage-IV (Euro-IV) and BS-III (Euro-III) petrol and diesel are superior fuels and the oil refineries have made huge capital investments, besides incurring higher operating costs in production of these fuels. The oil marketing companies have therefore been permitted to marginally increase the Retail Selling Price (RSP) of BS-IV petrol and diesel, to be supplied with effect from April 1, 2010,” said a government press release.
Senior officials at the petroleum ministry said that the hike in petrol and diesel in 13 cities, including the metros, will come into effect from midnight.
“The RSP of petrol will go up by 50 paise per litre and diesel by 26 paise per litre from April 1, 2010 (at Delhi), with corresponding increases in other cities depending upon the local levies,” it added.
It is being done to recover Rs.30,000 crore that the oil marketing companies had spent in upgrading their refineries.
Additionally, the three state oil marketing companies, Indian Oil, Hindustan Petroleum and Bharat Petroleum, have under recoveries – losses due to subsidised retail rates – amounting to Rs.40,000 crore this fiscal.
Petroleum Secretary S. Sundareshan warned last week that unless prices are increased the oil companies will face larger under recoveries totalling Rs.70,000 crore next fiscal.
State oil firms are currently losing Rs.6 per litre on petrol, Rs.4 per litre on diesel, Rs.17 per litre on kerosene and Rs.267 per cylinder of cooking gas.
The distribution of Euro-IV grade petrol and diesel will add to their under-recoveries at the rate of 41 paise per litre on petrol and 26 paise per litre on diesel.
The last fuel price hike took place after the Union budget was presented Feb 27, when the government increased excise duty and restored duty on crude oil. At that time, the price of petrol and diesel had been increased by Rs.2.71 and Rs.2.55 per litre, respectively.