Interestingly, Oil PSUs maintained static fuel priced since April 24 by 13 paise each, just until Karnataka went to polls, before announcing the hike no sooner had the state voted to elect a new government on Saturday.
Earlier this month, IOC Chairman Sanjiv Singh had stated that dynamic pricing was suspended temporarily despite a rise in global rates, to avoid panic among consumers.
According to estimates, since the start of April- Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd- have suffered the total loss of around Rs 1,500-1,700 crore with rising worldwide crude oil prices.
Indian Oil had stopped the daily price revision of petrol and diesel on April 25.
Those in Eldoret will part with Sh109.05 per litre of super petrol, Sh100.72 for diesel and Sh80.12 for kerosene. IndianOil Chairman, Sajiv Singh had said that even though the benchmark prices of petrol and diesel were rising, they "were not backed by fundamentals'". Today in various state capital the petrol price was hiked between 17 paisa to 18 paisa per litre, especially in Mumbai, where the price has been near Rs 83 per litre.
Fuel prices have soared quite a bit in 2018 - petrol has risen by up to ₹5.24 across major metro cities, while diesel by up to ₹7.39. Heavy dependence on imports, geopolitical uncertainties and cartelization by OPEC nations are some of the reasons why crude oil prices and consequently fuel prices have been on an upward swing in recent months.
Benchmark global diesel rates during this period have climbed from $84.68 per barrel to $88.63. Also, the rupee has weakened to Rs 67 per U.S. dollar from Rs 66.62, making imports costlier.
The withdrawal of the United States from the Iran nuclear agreement and re-imposing sanctions on the oil-producing country is likely to increase the price of oil in India as well, since India is the world's 3rd largest importer of oil, and Iran is India's 3rd largest supplier. The price was last changed on April 24 when it was at Rs 74.63 per litre.
Reacting to the price hike, former finance minister P. Chidambaram tweeted: "There we go again". Because of the reduction in excise duty, diesel prices had on October 4, 2017, come down to Rs 56.89 per litre and petrol to Rs 68.38 per litre.