In past two months we have seen sharp movements in the retail price of petrol in India. On 24 May 2012, Petrol Prices were hiked by Rs. 7.50 per litre which was the steepest ever hike in India which raised the prices of petrol close to 10% level. Soon after this hike was made, there was a wave of protest across India against this hike and there was a lot of political and social uproar against this hike. Also soon after the hike, the International crude oil priced started to soften which along with the political and social pressure made the Indian oil companies cut the price of petrol twice – a price cut of Rs. 2 per litre implemented on 3rd June 2012 and another cut of Rs. 2.46 per litre effective from 29th June 2012. This partial roll-back or price-cut was expected to be even more as the prices of International crude back then was well under $100 per barrel which allowed for some more cut, but as the dynamics of crude oil change very rapidly, the price of crude as on 23rd July 2012 is at levels higher than $100 per barrel. Considering these increased prices, state run oil companies have increased the prices of Petrol by Rs. 0.70 or 70 Paise per litre effective from 24th July 2012.
Apart from the increase in the price of crude oil, the weak Indian Rupee against US Dollar is also one of the major reasons for this hike because for each barrel of crude oil, Indian companies have to spend more in Indian Rupee when the value of Rupee against dollar is weak.
Considering the steep hike which was done on 24th May 2012 which shook the Indian politics and created a wave of protest, oil companies have started to play safe by rolling out very mild hikes like this one which is about 1% hike so that there is no major impact in one go. Such small hikes at regular interval are more acceptable compared to hikes of larger magnitude in longer periods.
After this recent hike of Rs. 0.70 per litre, the latest priced of petrol effective from 24th July 2012 in major cities of India are as follows:
- Petrol Price in Delhi is now Rs. 68.48 per Litre
- Petrol Price in Mumbai is now Rs. 74.23 per Litre
- Petrol Price in Kolkata is now Rs. 73.61 per Litre
- Petrol Price in Chennai is now Rs. 73.16 per Litre
- Petrol Price in Bengaluru is now Rs. 77.30 per Litre
We hope that Indian oil companies will not only hike the prices, but also cut the prices whenever there is a scope to do so, this will bring some relief to already burdened common man of India who is facing tough times because of inflation and high prices of almost everything of common needs.