Petrol prices rise for the 5th time in 6-months

The dip in inflation may prove to be a short term relief with fuel prices inching higher again. On Tuesday the government had said that inflation declined sharply to 7.48 per cent in November as compared to 8.58 per cent in October. But after the petrol price hike, inflation or price rise might start climbing up again.

Oil major BPCL has hiked petrol prices by Rs. 2.95 per litre. Other companies including IOC & HPCL are likely to follow suit.

The oil ministry allowed the three state-run firms to raise petrol prices after crude oil prices touched nearly $90 per barrel in the international market. Analysts say the upward pressure on crude is likely to continue and a relief on the fuel price front is unlikely soon for the common man. Goldman expects crude to average $100 next year and $110 in 2012.

The latest revision means that the petrol prices have risen 5 times in the last 6 months. The last hike of petrol prices was implemented on November 2. IOC, BPCL and HPCL have revised rates only four times since June 26 when petrol price was deregulated, while crude oil has jumped from $73-74 per barrel at that time to $90 a barrel now. After Tuesday’s increase, petrol prices have gone up by Rs. 4.44 a litre since deregulation.

Though diesel prices have not been hiked for now, the empowered group of ministers (EGoM) is likely to meet on December 22 to consider a hike in diesel prices.

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