State-run oil companies have decided to increase petrol prices by about Rs. 3 to partially make up for the rise in crude oil prices. But – for the time being – diesel rates will remain unchanged. New petrol rates were implanted yesterday.
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum will increase petrol prices by about 5.6% in the next two days due to swelling global crude prices. “HPCL will announce petrol price hike in a day or two” a director at HPCL said.
Bharat Petroleum, Indian Oil Corp and Hindustan Petroleum are oil companies are managed by the state and normally keep marginal variations of one-two paise in their respective petrol pumps. They also keep a delay in announcing petrol price hike to prevent private fuel retailers charging them of cartelization. These 3 firms dominate over 90% of the country fuel retail business and rule over decision making initiatives for private retailers like Reliance Industries, Shell India and Essar Oil.
To bring it on par with international fuel rates, state firms wanted to increase petrol prices by Rs. 5 but the oil ministry advised them against an abrupt rise. The government has given State-run companies the right to revise petrol prices but they usually consult the oil ministry before making decisions as this issue is politically sensitive. The increases would help the firms protect their margins with crude oil hovering close to $90 a barrel.
