New Delhi, Mar 1 (IANS) Petrol prices will go up by Rs.1.40 a litre, excluding taxes, from midnight Friday due to the depreciating rupee and a sharp increase in crude oil prices in global markets, the government-run oil marketing firms said Friday.
This is the second hike in over two weeks after the Feb 15 increase in the price of the fuel by Rs.1.50.
The country's largest oil marketing firm, Indian Oil Corporation, said the prices have been revised upward due to the depreciation in the value of rupee and rise in international crude oil prices.
"The combined impact of these two factors has compelled the company to revise the prices. The Corporation does not have any other option but to pass on the increase in motor spirit prices to consumers as the Corporation has already suffered losses on sale of motor spirit during the year," IOC said in a statement.
Taking into account local sales tax or value added tax (VAT), the effective hiked price for consumers will work out to Rs.70.74 in Delhi, Rs.78.34 in Kolkata, Rs.77.66 in Mumbai and Rs.73.95 in Chennai.
The latest hike comes after the finance ministry's annual economic review tabled in parliament Wednesday highlighted how high oil and gold imports are impacting the country's current account deficit, which has widened to 5.4 percent of the gross domestic product (GDP) in the July-September quarter of the current fiscal.
Over the years, India's energy prices have become misaligned and are now much lower than global prices for many products, the review said. The extent of misalignment was substantial leading to large untargeted subsidies.
While the government had budgeted over Rs.43,000 crore towards oil subsidy for the current fiscal, it had sought parliament approval for an additional Rs.28,500 crore on the same account.
The Indian basket crude oil on budget 2013 day traded at $108.44 per barrel.
In June 2010, the government had deregulated the price of petrol and announced that oil companies were free to fix it periodically.