Petrol, Diesel Prices Shoot Up After Karnataka Assembly Elections

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After holding the petrol and diesel price revision for 19 days in view of Karnataka elections, state-run oil companies raised the prices of the fuel on Monday.

State-owned Indian Oil Corp (IOC), whose price decision is followed by other refiners, said last week that it was keeping rates constant because the "current global oil price rise is not supported by fundamentals". As per IOCL's website, petrol price in Mumbai are now at Rs 82.79 a litre, while diesel prices reached Rs 70.66.

State-owned fuel retailers issued a notification earlier in 2017 stating that come May 1, 2017, a pilot policy would be initiated according to which, petrol and diesel prices will change every day in sync with worldwide rates, much like what happens in most advanced markets.

The government had in June 2010 freed petrol price from its control and the diesel rates were deregulated in October 2014. Recently, Petroleum Minister Dharmendra Pradhan had argued that almost a dozen countries have petrol and diesel prices higher than India. 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. Since 2012 union government has withdrawn all subsidies on fuel prices and the oil companies permitted to hike or reduce fuel prices on basis of the worldwide price of crude.

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Benchmark global diesel rates during this period have climbed from $84.68 per barrel to $88.63. The prices were increased by around 20 paise across India. But after that, the prices were frozen despite benchmark worldwide rate for petrol going up from United States dollars 78.84 per barrel, which was the measure to raise the prices on April 24. But, from April 1 to May 13, when oil prices rose 18 per cent, oil companies increased retail prices by just 1 per cent.

Oil PSUs, which have been since June past year revising auto fuel prices on a daily basis to reflect changes in the cost, have kept pump rates static since April 24, an analysis of daily price notification issued by oil companies showed.

The price hike now is to compensate for the loss incurred during this period.

A litre of Super petrol in Mombasa will cost Sh103.88, diesel Sh95.35 and Kerosene at Sh75.44.

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