Petrol, diesel prices rise for sixth consecutive day

New Delhi, June 12 (IANS): Petrol and diesel prices are continuously becoming expensive for the common man with oil marketing companies (OMCs) raising the fuel prices by about 60 paise per litre on Friday.

The auto fuel prices have now risen for the sixth day in a row, with petrol prices increasing by Rs 3.31 and diesel by INR 3.42 per litre since Sunday.

In three of the last five days, the prices have risen by a sharp 60 paise per litre while it increased by around 40 and 55 per litre on Tuesday and Wednesday respectively, and by 57/59 paise on Friday.

Sources in oil marketing companies said that price rise could continue for another week and 10 days as global product prices are forming up with a pick up in demand following opening up of economies across the globe post Covid-19 related lockdown.

Even global crude price are on the rise and its prices have more than doubled from April levels at over $40 a barrel level.

The increase in retail prices on Friday has been made under the dynamic pricing system for daily revision of fuel prices which OMCs resumed after over 83 days break during the lockdown period.

In the national capital, the retail price of petrol increased by 57 paise and diesel by 59 paise per litre to INR 74.57 and INR 72.81 per litre respectively.

In other cities, the increase could vary depending on the tax structure on products.

IANS has reported earlier that the daily price revision may begin in June and retail prices of petrol and diesel could go upto INR 5 a litre in phases.

Prices of transportation fuel were last revised under the dynamic pricing policy on March 16 and there were few instances of price hike only when the respective state governments hiked VAT or cess.

In a bid to increase revenues during the nationwide lockdown, several state governments raised taxes imposed on transportation fuel.

Already, the gap between cost and sale price of petrol and diesel for OMCs has reached around INR 5-6 per litre. If this has to be covered over a period of time, given there is no further increase in global prices, auto fuel prices may be increased by 40-60 paise per day for a couple of weeks to cover the losses.

The increase in retail price under daily price revision would largely depend on prevailing oil prices and global oil market at the time to determine the retail price.

However, lockdown has also curved demand for auto fuel. This could maintain some check on prices.

Raising retail prices became important for OMCs now as the recent steep excise duty hike without resultant increase in petrol and fiscal prices, had substantially brought down its marketing margins from record high level of INR 12-18 per litre.

If it is unable to raise prices when the global crude prices are rising, it would start incurring losses that will get steeper.