State-run Indian Oil Corporation, the country's largest oil refining and marketing firm, is seeking a Rs 5.18 per litre hike in price of diesel and Rs 4.70 per litre increase in petrol largely due to the surge in international crude oil prices.
The surge in crude oil prices necessitates a Rs 4 per litre increase in diesel and Rs 2 in petrol, IOC Chairman S Behuria said New Delhi.
Besides this, the increase in excise duty on the two products warrants a Rs 1.06 per litre rise in diesel and Rs 2.20 per litre in petrol prices, he said.
Other than this, the supply of ultra-low sulphur content petrol and diesel calls for Rs 0.34 per litre rise in diesel and Rs 0.30 per litre hike in petrol prices.
Behuria said the company is expected to lose Rs 300 crore (Rs 3 billion) on petrol and diesel sales in the first fortnight of April because of unchanged prices. In addition, the oil major will lose Rs 350 crore (Rs 3.50 billion) during the same period on selling liquefied petroleum gas (LPG) and kerosene below the cost.
The Union Cabinet is expected to meet on Friday to decide on the possible petroleum price hike. The petroleum ministry has already submitted a Cabinet note on the issue.
Petrol and diesel prices in the country have not been changed since November 2004, leading to huge revenue loss to public sector oil firms which are being forced to sell the fuel at below the cost.
The Indian basket of crude oil has scaled to an all-time high of $53 a barrel, pushing the country's import bill.
