Petrol, Diesel Prices Likely To Increase By Rs 4 Per Litre: A Rs 4 per liter increase in petrol and diesel prices as per the current scenario that is state-owned fuel retailers which marked the return to pre-Karnataka poll space margin levels, brokerage firms told the same.
Now the state Karnataka polled to elect a new state government, state-owned Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) on the last Monday ended a 19-day hiatus which is revising petrol and diesel prices that are reverted to the practices of changing rates on the regular basis.
Post this petrol price has risen by 69 paise a liter, that is consists of the 22 paisa hike that affected today that took rate in Delhi to Rs 75.32, the uppermost and the highest in almost around 5 years span.
Diesel prices have been increased by 86 paisa a liter, including 22 paisa increase today that took the rate to their highest ever of around Rs 66.79 a liter in Delhi.
“Our computation suggests that downstream oil marketing companies (OMCs) are required to increase retail prices of diesel by a steep Rs 3.5-4 a litre and gasoline (petrol) by Rs 4-4.55 per litre in the coming weeks to earn normative gross marketing margins of Rs 2.7/litre,” Kotak Institutional Equities stated in their official report.
The increase is based on assumption that global price of diesel and petrol and Rupee-US Dollar exchange rate that can remain stable hereon.
“We note that the lack of price hikes over the past three weeks, before Karnataka elections amid a sharp increase in global crude/product prices, has resulted in sharp moderation in gross marketing margins to around Rs 0.5-0.7 a liter,” it said.
On the Last week, ICICI Securities had told that auto fuel net marketing margins were weak at Rs 0.31 a liter because of the no price hike post 24th April.
OMCs returned to daily price revision from this 14th May. They are predictable said to have lost about Rs 500 crore on captivating higher cost that was resulting from the spike in international oil rates and fall in rupee against the US dollar.
The benchmark international rate for petrol is actually used for the revising rate on April 24, had gone up from $78.84 per barrel to $82.98 on May 14.
This has been further raised to $83.30, representing more daily hikes that required to level retail price with cost.
In the same way, benchmark international diesel rates during this period have ascended from $84.68 per barrel to $88.93. Also, the rupee has weakened to Rs 67.06 per US dollar from Rs 66.62, making imports costlier.