Get ready to pay Rs 3 a litre more for petrol from Thursday.

By the time you read this, state-run Bharat Petroleum Corporation will have raised its pump price by Rs 2.95 a litre from midnight, which will effectively round off the figure for consumers due to incremental increase in state taxes. 

Market leader IndianOil and Hindustan Petroleum, too, will raise their prices by almost the same amount over the next two days. An increase of Rs 1.50-2 a litre in the price of diesel is likely next week. 

The three public sector oil marketing firms are raising prices for the fifth time since the government in June lifted its control on the fuel. The companies, however, still seek a nod informally from the parent oil ministry before revising prices. The ministry uses this system to pare the increase needed to bring street price of petrol in tune with global trends. 

This time too, the ministry asked the companies to limit the increase to Rs 2.95 even though the companies are losing about Rs 4.17 per litre on selling petrol below its import cost. The companies will then still lose some Rs 1.22 a litre. Sources said the ministry on Wednesday had sought clearance from the political leadership for allowing such a hefty hike. Next on the agenda is an increase of Rs 1.50-2 a litre in the price of diesel. The ministerial panel on fuels under FM Pranab Mukherjee is expected to clear the revision at its meeting scheduled for December 22. 

Declining inflation gives a certain comfort level to the government. A moderate hike in diesel price will prune oilmarketers’ losses without putting too much pressure on inflation. Source by Times of India