Crude Shock: Get ready for Rs 75 per litre of petrol

The impact of zooming crude oil prices that is the most talked about issue across the globe these days is going to hit you soon in India. Fill in more petrol in your cars soon; for the Indian government is all set to hike the prices of petroleum products.

It will not be a simple hike of a few rupees. If officials in the Ministry of Petroleum are to be believed, petrol prices will be hiked anything between Rs 10-Rs20 per litre soon.

If it is hiked so, it will be the first time in history that Indians will get such a huge increase in their fuel bills. In a city like Mumbai, this would mean that you will have to shell out nearly Rs 70 per litre of petrol.

In the past few months, India’s state-owned oil companies have been reeling under the rising crude oil prices across the globe. Companies like Indian Oil, ONGC and Bharat Petroleum have been incurring losses of several hundreds of crores as they continue to dole out subsidsed petrol, diesel and cooking gas to the people.

But now, officials said, the impact of the rising oil prices is such that there is no option but to decontrol petrol prices, a move that may see rates being hiked anything between Rs 10-20 a litre.

In India, petrol is currently being sold at a loss of Rs 16.34 a litre and diesel at Rs 23.49 per litre. Officials said deregulating petrol price would mean that its prices would move in tandem with global crude oil prices.

The rise in global oil prices that last week touched an all time high of $135 a barrel has forced the government to consider options to save state-run firms that expect a revenue loss of Rs 200,000 crore (Rs 2000 billion) this fiscal on sale of petrol, diesel, domestic LPG and kerosene.

Officials said deregulating petrol would lower the revenue losses by just Rs 20,000 crore (Rs 200 billion). Half of the current estimates are on account of diesel rates.