Karnataka polls over, petrol, diesel prices rise after 19 day freeze

With the Karnataka polls over, oil marketing companies have opted for a price rise in petrol and diesel after a gap of 19 days.

The price of petrol was increased 17 paise per litre and that of diesel by 21 paise per litre in Delhi on Monday. Petrol price was seen at Rs 74.80 per litre, the highest since September 2013, and diesel was seen at Rs 66.14 per litre. The prices were kept on freeze starting from April 24, on the back of the Karnataka polls.

The prices of petrol zoomed by 17 paise per litre in Mumbai, 18 paise per litre in Kolkata and 18 paise per litre in Chennai. On the other hand, Mumbai and Chennai saw a rise of 23 paise each in diesel prices and 5 paise per litre in Kolkata.

State-run oil marketing companies like Indian Oil Corporation (IOC), Bharat Petroleum Corporation and Hindustan Petroleum Corporation (HPCL) were facing a huge cut in their marketing margins to an average of around Rs 2-3 per litre on petrol and diesel.

However, IOC chairman Sanjiv Singh had said that the prices were kept on hold so as to avoid panic among the common man. On an annualized basis, a one-rupee reduction in margin on both petrol and diesel would result in Rs 130 billion-worth of an annual shortfall in OMC revenues.

The rise in prices was mainly owing to the rise in international crude oil prices. The Indian basket crude oil price was $75.26 a barrel on Monday, while international prices were seen at $76.69 a barrel at one point on Monday. At present, the Centre levies Rs 19.48 a litre and Rs 15.33 a litre on diesel as excise duty. Centre had gone for a cut in excise duty in the month of October by Rs 2, which according to the government has led to a revenue loss of more than Rs 130 billion on an annual basis.