Petrol prices may be hiked by Rs 0.65 per litre this week if state-owned

RELATED ARTICLES Oil companies hint at a cut in petrol prices next month

oil firms manage to get political approval for the move.

While a fall in the rupee to an all-time low of Rs 53.75 per US dollar has resulted in an increase in the cost of oil imports, international rates of gasoline -- against which domestic petrol prices are benchmarked -- have also increased, a top source at a state-run oil firm has said.

"The under-recovery on petrol is Rs 0.55-0.56 per litre. After

adding local sales tax, the desired increase in Delhi comes to Rs

0.65-0.66 a litre," he said, adding that the oil companies will review

prices tomorrow and any change will be effective from December 16.

State-owned oil firms have cut petrol prices on two occasions

in the past one month after international oil rates eased.

The companies reduced petrol prices by Rs 2.22 per litre, or

3.2 per cent, from November 16 and followed this with a Rs 0.78 per

litre cut from December 1.

The source, however, could not say if oil companies will go

ahead with increasing prices tomorrow, in line with the practice

of changing rates every fortnight. "The actual loss to us is only

50-55 paise. We can tolerate it for another fortnight if need be," he said.

Public sector oil firms, which revise petrol prices on the 1st

and 16th of every month based on the average international rates

of the previous fortnight, may informally consult the parent Petroleum

Ministry before taking a decision.

Parliament is in session and an increase in petrol prices may

lead to protests by Opposition parties.

The price of gasoline has averaged USD 111.11 per barrel in

Singapore this month, up from USD 108.25 a barrel in the previous

fortnight.