State-owned oil companies are all set to hike petrol prices by around Rs 3 per litre which will be effective from midnight tonight.
"Looks like the hike will be over Rs 3 per litre," a top official at one of the three state-run fuel retailers said.
Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindsutan Petroleum Corp (HPCL) now lose Rs 2.61 per litre due to high international crude oil prices and with rupee touching two-year low against the US dollar, the losses have increased the cost of importing crude oil.
"After adding local taxes, the hike needed at retail level comes to over Rs 3 per litre," the official said.
Petrol price were last hiked by Rs 5 per litre on May 15. It costs Rs 63.70 per litre in Delhi.
"The exact quantum of hike at different cities is being worked out," the official said.
Petrol price was freed from the government control in June last year but the retail rates have not moved in line with cost as high inflation rate forced the oil companies to seek 'advice' from parent oil ministry before revising rates.
IOC, BPCL and HPCL have lost Rs 2,450 crore this fiscal on selling petrol below the cost. Besides petrol, the three firms are losing Rs 263 crore per day on selling diesel, domestic LPG and kerosene below cost.
Diesel is being sold at a subsidy of Rs 6.05 a litre, kerosene at Rs 23.25 per litre while domestic LPG rates are under-priced by Rs 267 per 14.2-kg cylinder.
Rupee fell to 48 per dollar yesterday for the first time since September 2009. "Every rupee depreciation, the under- recovery (revenue loss) increases annually by around Rs 9,000 crore," he said.