NEW DELHI: State-run oil marketing firms (OMC) hiked fuel prices for the third straight day on Wednesday in an effort to bridge the gap between global benchmarks and local prices. The OMCs had instituted a 19-day freeze in fuel prices during the run-up to the Karnataka polls even as global crude oil and derived product rates spiked.
While the OMCs and the government have denied any directions to freeze oil prices ahead of the Karnataka polls, the end of the Assembly elections has seen petrol rates increase by 46-50 paise per litre across Delhi, Kolkata, Mumbai and Chennai in just three days. Diesel prices have been hiked by 48-69 paise per litre in the four metros.
Three straight days of price hikes have sent petrol rates above Rs75 in the national capital, while in Kolkata, Mumbai and Chennai prices stand at Rs 77.79, Rs 82.94 and Rs 77.93 per litre, respectively. The last time prices were higher in Delhi was in September 2013.
The previous highs in other metros were Rs 78.03 (Kolkata, August 2014), Rs 83.62 (Mumbai, September 2013) and Rs 79.55 (Chennai, September 2013), respectively.
Diesel also continues to reign at all-time highs in the four cities, with prices at Rs 66.57 (Delhi), Rs 69.11 (Mumbai), Rs 70.88 (Kolkata) and 70.25 per litre (Chennai).
“There is likely to be scope for further hikes because OMCs are trying to catch up with global benchmark rates after the freeze,” a senior oil market analyst observed, noting that diesel and petrol rates were likely to hit much higher levels if no intervention was forthcoming, either from the government or the OMCs.
Global crude oil rates, which have been on a steady upward trajectory since June last year and are teasing the $79-80 per barrel mark currently, are expected to rise further as US sanctions on Iran begin to take form. However, accelerating prices might be controlled if Saudi Arabia and other oil producers increase output to compensate for the loss of Iranian supply.