State-owned oil companies on 3 November 2011 raised petrol prices by Rs 1.80 per litre at a time when the nation is already battling high double-digit food inflation. This is the 13th increase in petrol prices since the fuel was decontrolled in June 2010. Petrol prices were last raised by over Rs 3 a litre on 15 September 2011. With the latest price rise, the fuel's price has risen 33.5% since it was decontrolled in June 2010.
The latest rise in petrol prices came after Brent crude oil fell for four consecutive days before rising about half a dollar on 3 November. The sharp rise is due to high crude prices particularly Brent as well as rupee deprecation. As per RBI reference rate, $1 was equivalent to Rs 49.3748.
The India crude oil basket for the fortnight ended 31 October was recorded at $108.59 a barrel. the average exchange rate for the fortnight stood at Rs 49.36 to a dollar. The Indian basket of crude oil touched $ 108.40 a barrel on 3 November 2011.
A litre of petrol now cost nearly Rs 28 more than diesel. The gap was barely Rs 11 in the middle of 2010 but the government controls diesel prices and has not raised diesel rates. Diesel prices have risen barely 2% sice June 2010 thereby accelerating sales of diesel vehicles and dampening demand for petrol cars.
The government's pricing policy and absence compensation to oil companies for selling kerosene and cooking gas below cost has hurt oil marketing companies.
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