Petrol prices may go up by up to Rs. 3 per litre from March 2012. The hike is expected to be announced after the assembly elections get over in Uttar Pradesh. At present, petrol is being sold at Rs. 65.64 per litre in New Delhi. After the Rs. 3 hike expected next month, the price will be around Rs. 68.64 per litre.
Petrol prices in India, at present, are about Rs 3 less than international market crude oil rates which has risen to $128 per barrel from the $109 per barrel that it was two months ago.
“The company can’t sustain for long. We will be forced to raise petrol prices if (international) prices prevail at this level,” RC Butola, Chairman, Indian Oil Corporation, was quoted as saying by The Economic Times.
Petrol prices were earlier revised in December 2011. State-run oil retailers reduced the prices of petrol by Rs. 0.78 (78 paise) per litre. The price cut was then possible because the decline in international rates of the crude oil was higher than the depreciation of the rupee. International crude oil prices had come down to $ 109 from $ 116 per barrel. But now, with crude oil prices at $128 per barrel oil companies have been forced to hike petrol prices once again.
The hike will definitely have an impact on petrol car sales and the Indian auto industry which is already suffering from declining car sales. The following table shows the current petrol prices and the petrol prices post Rs. 3 hike expected in March 2012.