How Karnataka elections cut holes in oil company profits

  • How Karnataka elections cut holes in oil company profits

How Karnataka elections cut holes in oil company profits

Petrol and diesel prices were hiked on Monday after a 19-day pre-Karnataka poll hiatus, bringing petrol prices in Delhi to a 56 month peak at Rs 74.80 per litre, and diesel prices to a new all-time high at Rs 66.14 a litre.

After the prices of petrol and diesel remained stable for the last almost 19 days it has been increased on Monday. The companies are estimated to have incurred loss of about Rs 500 crore as they did not revise the prices despite a spike in worldwide rates and fall in rupee against the U.S. dollar. According to the International Olympic Committee website, now petrol in Delhi will be available at Rs 74.80 per litre. In Bengaluru, the price of petrol increased to Rs. 76.01 per litre and diesel went up to Rs. 67.27 per litre. IndianOil Chairman, Sajiv Singh had said that even though the benchmark prices of petrol and diesel were rising, they "were not backed by fundamentals'". Petrol prices were raised by 17 paise per litre while diesel received 21 paise per litre hike.

Worldwide crude oil prices have firmed up meanwhile adding to the pressure on oil companies. Benchmark worldwide rate for petrol during this time went up from $ 78.84 per barrel to $ 82.98, while diesel rates during this period have climbed from $ 84.68 per barrel to $ 88.63. The markets suffered a total revenue loss of Rs 380 crore in this period, according to an analysis by the Business Standard.

Between April 25 and May 14, the cost and freight of petrol and diesel has increased by $4.15 and $3.94 per barrel, respectively, according to the price build-up at BPCL's Delhi filling station, Economic Times reported on Monday. Earlier, government oil companies used to review oil prices twice a month. We can expect further price hikes in the coming days. To remind you, the Modi government had cut excise duty by Rs 2 per litre in October 2017, when petrol price reached Rs 70.88 per litre in Delhi and diesel Rs 59.14. Petrol would cost ₹77.81 a litre and power petrol ₹80.77 a litre, said dealers.