Petrol and diesel prices were hiked in metros on Thursday, 11 June, marking the fifth straight day of increase since state-owned oil companies returned to the normal practice of daily reviews following a 12-week pause.
In three of the last five days, the prices have risen by a sharp 60 paise per litre while it increased by around 40 and 55 paise per litre on Tuesday and Wednesday.
With effect from 6 am, the prices of petrol and diesel were increased by 60 paise per litre each in Delhi. While the price of petrol was revised to Rs 74 per litre in the national capital from Rs 73.40 per litre the previous day, the diesel rate was increased to Rs 72.22 per litre from Rs 71.62 per litre, according to notifications from state-run Indian Oil Corporation – the country's largest fuel retailer.
Sources in oil marketing companies said that price rise could continue for another week or 10 days as global crude prices are firming up with a pick up in demand following opening up of economies across the globe post COVID-19 related lockdown. Even global crude prices are on the rise and its prices have more than doubled from April levels at over $40 a barrel level.
News agency IANS had also published earlier that daily price revision may begin in June and retail prices of petrol and diesel could go up to Rs 5 a litre in phases.
Prices of transportation fuel were last revised under the dynamic pricing policy on 16 March and there were few instances of price hike only when the respective state governments hiked VAT or cess. In a bid to increase revenues during the nationwide lockdown, several state governments raised taxes imposed on transportation fuel.
Already, the gap between cost and sale price of petrol and diesel for OMCs has reached around Rs 5-6 per litre. If this has to be covered over a period of time, given there is no further increase in global prices, auto fuel prices may be increased by 40-60 paise per day for a couple of weeks to cover the losses.
The increase in retail price under daily price revision would largely depend on prevailing oil prices and global oil market at the time.
However, lockdown has also curved demand for auto fuel. This could maintain some check on prices.
(With inputs from IANS)