Diesel price likely to rise, petrol to go down

Diesel prices may again be hiked by the weekend, sources in state-run Indian Oil Corporation (IOC) said Thursday.

The petrol price may be cut by Re1 per litre while the price of diesel is likely to be increased by 40-50 paise a litre, the sources indicated.

It would be third hike for the diesel since the government's Jan 17 decision to allow oil marketing companies (OMC) raise diesel prices periodically till their losses on sale of the fuel are eliminated.

However, in the coming round of revisions petrol rates are likely to be cut in line with falling international crude oil prices.

The petrol price was hiked by Rs1.50 a litre Feb 16 and by a further Rs.1.40 per litre March 2. It currently sells at Rs70.74 a litre in Delhi.

Since the last revision, international petrol prices have come down from $131 to $120 per barrel.

Diesel prices have been hiked twice since the partial deregulation of January and it currently costs Rs48.16 a litre in Delhi.

Oil companies currently lose Rs11.26 per litre on the sale of diesel.

The move to deregulate diesel prices was necessitated by the fact that oil companies had accumulated losses of Rs52,711 crore from April-September, 2012.

Diesel prices had the sharpest ever rise September 2012, when it was increased by Rs5.63 a litre.

The oil companies had incurred under-recoveries of about Rs81,192 crore for the 2011-12 and Rs34,706 crore in 2010-11.