Petrol price on Monday was hiked by 7 paise per liter and diesel by 18 paise for the fourth straight day as the international oil rates broke a nearly two-month-long hiatus in a price revision.
Petrol price in Delhi on Monday was hiked to Rs 81.53 a liter from Rs 81.46 per liter, according to a price notification from oil marketing companies. Similarly, diesel prices rose to Rs 71.25 a liter in Delhi from a level of Rs 71.07 a liter on Sunday. State-owned fuel retailers started raising fuel prices from Friday.
In four days, the petrol price has gone up by 47 paise and diesel rates have risen by 79 paise per liter. Petrol prices had been static since September 22, and diesel rates hadn’t changed since October 2.
Though retail pricing of petrol and diesel has been deregulated and oil marketing companies were following a daily price revision formula, the same was suspended for almost two months to prevent volatility in international oil markets from impacting fuel prices regularly during the pandemic.
But with crude on the boil again on news of a successful coronavirus vaccine launch soon, the OMCs have finally resorted to price increase again to cover for their under-recovery on the sale of two petroleum products.
The benchmark Brent crude has crossed $45 a barrel on Intercontinental Exchange (ICE). It has remained at over $43 a barrel for the most part of November.
The OMCs need almost 40 paise per liter increase in the retail price of petrol and diesel to cover for a $1 increase in crude. Going by this yardstick, product prices would have to be increased by up to Rs 2 per liter to cover under-recovery on its sale.
