Oil PSUs, who had kept rates unchanged for nearly three weeks before Karnataka went to the polls despite input cost spiking, reverted to daily revision in prices on Monday

After a 19-day pre-Karnataka poll hiatus, the petrol price was on Monday hiked by 17 paise a litre and that of diesel by 21 paise as Public Sector Undertaking (PSU) oil firms began passing on the spike witnessed in international rates to consumers.

The petrol price in Delhi was hiked to ₹74.80 from ₹74.63, while diesel rate was increased to ₹66.14 from ₹65.93, according to a price notification issued by state-owned oil marketing companies.

With this, the diesel price had touched a record high while petrol is at a 56-month peak.

Oil PSUs, who had kept rates unchanged for nearly three weeks before Karnataka went to the polls despite input cost spiking, reverted to daily revision in prices no sooner had the State voted on Saturday to elect a new government.

Also Read How State budgets will fare if petrol, diesel are brought under GST

State-owned oil marketing companies are estimated to have lost about ₹500 crore as they absorbed higher cost resulting from the spike in international oil rates and fall in rupee against the US dollar.

Pump rates static since April 24

Oil PSUs, which have been since June last revising auto fuel prices on a daily basis to reflect changes in the cost, have kept pump rates static since April 24, an analysis of daily price notification issued by oil companies showed.

Indian Oil Corp (IOC) Chairman Sanjiv Singh last week said the state-owned firms were “temporarily moderating” prices to avoid sharp spikes and panic among consumers.

The petrol and diesel prices were last revised on April 24 when they were hiked by 13 paise each. But prices were frozen thereafter. This despite benchmark international rate for petrol going up from $78.84 a barrel, which was used for raising the price to ₹74.63 a litre on April 24, to $82.98 now, according to sources privy to fuel pricing methodology.

The benchmark international diesel rates during this period have climbed from $84.68 a barrel to $88.63. Also, the rupee has weakened to ₹67 a US dollar from ₹66.62, making imports costlier.

Oil Minister Dharmendra Pradhan last month denied reports of a directive to the oil firms to absorb at least Re 1 a litre hike by not raising prices in line with cost.

The prices at petrol pumps of state-owned fuel retailers like the IOC were cut by 1-3 paise every day in the first fortnight of December 2017 before Gujarat went to the polls.

They started moving up immediately after polling concluded on December 14, leading to speculation that the government may have asked oil companies to hold the prices.