Fuel price increased

India is 80% dependent on oil imports to run its growing economy. Oil companies are allowed to review crude prices and accordingly raise petrol and diesel prices. India liberalised petrol prices in June 2010. Petrol price was on Friday once again hiked by `.1.50 per litre and diesel by 45 paise a litre with effect from midnight. The increase announced is excluding local sales tax or VAT and the actual hike for consumers would be more after the incidence of duty is included.

Increase in diesel price is in line with the government’s decision to increase the fuel’s price by about 50 paise per litre every month till losses from selling it below cost are almost wiped out. The increase in petrol prices, however, can be attributed to the spike in global crude prices.

According to the central government’s Petroleum Planning and Analysis Cell, the price of the Indian basket of crude has risen to $114.88 per barrel on 14th February 2013 from an average price of $109.95 between 16 – 31 January 2013. The rupee-dollar exchange rate has, however, improved to 53.43 from 54.78 per dollar during the period.