Sharp Petrol Price Hike Expected

Bangalore: As the elections in five states are out of the way, the government-run fuel retailers raise up their demand for an boost in petrol prices by as much as 5 a litre. The demand could leave the government with a political cleft stick, coming on the day Congress received a severe drubbing in the assembly polls.

Oil marketing companies (OMCs) have met petroleum ministry to talk about petrol price hike by Rs 5/litre. Indian Oil , Hindustan Petroleum and Bharat Petroleum were the three major state-owned oil companies that had last hiked petrol prices by 3.14 a litre on September 16 last year. Prices were first heaved in the same year by 3.5 per litre on January 16 and by 5 per litre on May 15.

Approaching for another hike, oil companies said that they were losing 1.50 per litre on petrol and after including local levies, the desired increase in retail prices was 1.82 per litre. According to media reports, these firms may request for compensation from government for losses acquired on selling petrol. Till now, OMCs have lost nearly 1,500 crore in selling petrol for the 2011 financial year.

Losses of state-run firms emerge to leave little choice for the Centre but to allow some hike, possibly 3 a litre or so. But the jury is still skeptical, whether they will have the courage to break the coldness just before or during the Budget session which is scheduled from March 12 for illustrating criticism from heartened allies and resurgent regional parties like Trinamool and SP.