Petrol price hiked by Rs 1.80 a liter

The petrol prices in the country have gone up by Rs 1.80 yet again. This is the fourth revision of the petrol prices during this year and second time in the past two months. The petrol price was raised by Rs 3.14 only in last September and the state owned oil companies including the Hindustan Petroleum, Indian Oil Corporation and Bharat Petroleum have decided to hike the petrol price by Rs 1.80 to make up for the losses. Although the crude oil prices have decreased in reality by $3 from $108 a barrel to $105.6, the oil companies have decided to go ahead with the price hike.

It is the government who has to give the final nod of approval over the petrol price hike albeit the oil companies hold the decision making power only on the papers. In truth, the oil companies are making a profit of 25 paise a liter, nevertheless there are stronger reasons to implement the hike on petrol. The fluctuating rupee against the dollar which has been depreciating during the past two months from Rs 48 a dollar to Rs 49.14 as recorded on Thursday is the major reason of concern. India, which has to depend mostly on the imports of the crude oil for about 85% to meet the domestic requirements has to invest a large chunk of money to buy the crude oil.

Unfortunately, the petrol price hike comes on top of the extremely high food inflation of 12.21% in October, which is pushing the slowdown in the market further into gallows. People are tending to move towards diesel cars to overcome the brunt of petrol price hike, however the situation is not likely to remain the same way. The diesel price hike is likely to follow the petrol price hike very shortly. The petrol price has been revised for around 10 times since its deregulation in 2010 June.

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