HYDERABAD: Petrol prices are likely to shoot up by Rs 2 to Rs 3 in the coming days, predict petroleum dealers associations citing that the prices were not revised over the last 19 days. Allegations are flying high that the fuel prices were ‘frozen’ with the Karnataka elections in mind. The rise in fuel rate will hit both pump owners and the public alike. Public sector oil companies had last raised prices of petrol and diesel by 17 paise and 21 paise on April 24.
On May 14 and 15 the retail fuel price in Hyderabad rose by Rs 0.19 and Rs 0.16 respectively. For diesel, the rates rose by Rs 0.26 and Rs 0.24 respectively. “At this moment, it’s just a speculation and can’t be confirmed,” said a senior official with the Oil Marketing Companies (OMC).“Any pricing matter is decided by the oil industry pricing group,” added the official.
Fuel pump dealers earn on a fixed commission rate based on units sold. So, when the fuel prices go down or when it remains flat like from April 24 to May 12, they do not have to shell out huge sums as working capital for buying fuel. But when the fuel prices go up, so does the working capital for buying fuel.
“These 19 days were a cushion for us, it was easy to do business as I know what my margin and a working capital requirement were. But during this time, the oil companies were making losses. Now that the Karnataka elections are over the oil companies will hike up the retail fuel rates to catch up on those losses,” said Prashant Reddy, a city-based petrol pump owner.