Petrol, diesel prices rise again on fresh surge in global oil prices

New Delhi, Oct 8 (IANS) Prices of auto fuels petrol and diesel rose on Friday too as global oil surged again, with benchmark Brent crude gaining over 1 per cent to cross $83 a barrel.

Diesel prices increased by a sharp 35 paisa in the national capital to Rs 92.12 per litre on Friday while petrol prices increased by 30 paisa to Rs 103.54 a litre, according to the Indian Oil Corporation, the country's largest fuel retailer.

Diesel prices have now increased on 12 out of the last 15 days taking up its retail price by Rs 3.50 per litre in Delhi. Its prices increased between 20-30 paisa per litre so far, but since Wednesday, it breached this to a 35 paisa per litre increase.

With diesel prices rising sharply, the fuel is now available at over Rs 100 a litre in several parts of Madhya Pradesh. This dubious distinction was earlier available to petrol that had crossed the Rs 100 a litre mark across the country a few months earlier. The fuel is getting close to Rs 100 a litre in Mumbai at Rs 99.92 a litre now.

Petrol prices had maintained stability since September 5 but oil companies finally raised its pump prices last week and this week given a spurt in the product prices lately. Petrol prices have also risen on nine of the previous 11 days taking up its pump price by Rs 2.35 per litre.

OMCs had preferred to maintain their watch prices on global oil situation before making any revision in prices. This is the reason why petrol prices were not revised for last three weeks. But extreme volatility in global oil price movement has now pushed the OMCs to effect the increase.

In Mumbai, the petrol price increased by 29 paisa to reach Rs 109.54 per litre while diesel rates increased by 37 paisa to climb to Rs 99.92 a litre.

Across the country as well, petrol and diesel increased between 30-40 paisa per litre but their retail rates varied depending on the level of local taxes in the state.

Fuel prices in the country have been hovering at record levels on account of 41 increases in its retail rates since April this year. It fell on few occasions but largely remained stable.

Crude price has been on a surge rising over three year high level of over $83 a barrel now. Since September 5, when both petrol and diesel prices were revised, the price of petrol and diesel in the international market is higher by around $9-10 per barrel as compared to average prices during August.

Under the pricing formula adopted by oil companies, rates of petrol and diesel are to be reviewed and revised by them on a daily basis. The new prices becomes effective from morning at 6 a.m.

The daily review and revision of prices is based on the average price of benchmark fuel in the international market in the preceding 15-days, and foreign exchange rates.

But, the fluctuations in global oil prices have prevented OMCs from following this formula in totality and revisions are now being made with longer gaps. This has also prevented companies from increasing fuel prices whenever there is a mismatch between globally arrived and pump price of fuel.