State owned oil firms raised petrol prices by INR 3.14 per litre as the rupee touched two year low against the US dollar, increasing the cost of importing crude oil. The hike will be effective from September 15th 2011 midnight.

A top government official said that "Oil retailers are losing INR 2.61 per litre or INR 15 crore per day on sale of petrol. Together with local taxes, the hike needed to level domestic rates with international prices is about INR 3 per litre.”

The official added that "At current rate, oil firms will accrue another INR 2,850 crore of loss on sale of petrol, taking the total loss on a fuel that was freed from control, to INR 5,300 crore for the full fiscal adding that oil firms will have to take a call on raising petrol price soon."

IOC, BPCL and HPCL have lost INR 2,450 crore this fiscal on selling petrol whose rates were freed from government control in June last year below the cost.

Besides petrol, the three firms are losing INR 263 crore per day on selling diesel, domestic LPG and kerosene below cost. Diesel is being sold at a subsidy of INR 6.05 a litre, kerosene at INR 23.25 per litre while domestic LPG rates are under-priced by INR 267 per 14.2-kg cylinder.

(Sourced from ET)