In one swift move, state-owned oil firms IOC ,BPCL and HPCL hiked petrol price by Rs 6.28 per litre, effective midnight. Including sales tax, the hike adds up to Rs 7.50/litre.
The increase was on the cards with the rupee continuing its free fall against the US dollar, but the quantum of the hike took the country by surprise. However, diesel price has been left untouched though under-recoveries have been much sharper in that commodity as well as kerosene and LPG.
former ONGC CMD RS Sharma said some correction was warranted in diesel and LPG price as well. In absolute terms, diesel makes the largest impact followed by LPG, he said adding the move will impact even those who can afford it.
PK Goyal, director-finance at IOC said since the company needed to bring down excise duties up to the level of under recoveries, a price hike was the only option.
Asked when can one expect a hike in diesel prices, Goyal said it was a controlled procduct and hence the government had to take a decision. IOC has lost Rs 10,680 crore of under-recoveries on diesel itself.