Indian Oil Corporation has announced that it will increase the price of petrol by Rs. 0.70 per litre excluding state levies with effect from midnight of July 23. The Oil Manufacturing Company said that the rise was required due to a constant increase in global crude oil prices and continuing volatility in the foreign exchange market.
According to estimates, an Indian basket of crude oil costs USD 101.28 for every barrel, compared to international prices of USD 111.59 per barrel. The value of rupee has also affected the import bills for oil companies as Rupee now stands at Rs. 55.36 against the US dollar.
IOC, which was suffering losses at the rate of Rs. 1.41 for every litre of petrol sold in the country, also said that it will increase the price by Rs. 0.70 per litre and will continue to look for taking further steps on the matter.
Even as the petrol prices were freed from government regulation in June last year, the state-run firms often rely on recommendations from the Oil ministry in fixing the prices. Now it is to be seen if the intent to increase prices will be informally approved by the government.