This was the first hike in 19-days but the state-owned oil companies have been hiking fuel prices since June a year ago.
This development, which coincided with the run-up to the Karnataka assembly elections, has brought to the fore an evergreen debate: does the government continue to interfere in the pricing of petrol and diesel despite deregulation? Today in various state capital the petrol price was hiked between 17 paisa to 18 paisa per litre, especially in Mumbai, where the price has been near Rs 83 per litre.
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Meanwhile, global crude Oil prices on Monday fell away from last week's multi-year highs as a relentless rise in USA drilling activity pointed to increased output, while resistance emerged in Europe and Asia to US sanctions against major crude exporter Iran. Benchmark global rate for petrol during this time went up from $ 78.84 per barrel to $ 82.98, while diesel rates during this period have climbed from $ 84.68 per barrel to $ 88.63.
With May 15 increase, petrol price in Delhi was at a new 56 month peak, whereas the price of diesel registered a fresh all-time high. The rupee steadily weakening against the dollar only makes matters worse. It is to be noted that Indian Oil had stopped the daily price revision of petrol and diesel on April 25, 2018.
"The OMCs which sustained all the losses due to it, will now certainly try to recover their losses by increasing the oil prices" said Madan Sabnavis, Chief Economist at CARE Ratings. To remind you, the Modi government had cut excise duty by Rs 2 per litre in October 2017, when petrol price reached Rs 70.88 per litre in Delhi and diesel Rs 59.14.
Nakuru motorists will pay Sh107.86 for super petrol, Sh99.54 for diesel and Sh79.05 for kerosene per litre. Earlier, government oil companies used to review oil prices twice a month.