Petrol, diesel prices hit new highs, rise for 9th consecutive day

Prices of petrol and diesel, already at unprecedented levels in the country, rose for the ninth consecutive day on Monday, even as analysts said the dual impact of rising oil prices and the depreciating rupee increases regulatory risks for state-run oil and gas firms.

In the national capital, petrol was sold at Rs 79.15 per litre, up from Rs 78.84 on Sunday.

In Kolkata, Chennai and Mumbai, the fuel was priced at Rs 82.06, Rs 82.24 and Rs 86.56 per litre, respectively, all a new record, against Rs 81.76, Rs 81.92, Rs 86.25 on Sunday.

The surge in fuel prices is largely attributed to the rise in crude oil prices and high rate of excise duty in the country. Brent crude oil is currently priced over $78 per barrel.

The recent slump in rupee also has lifted the import cost of crude oil, subsequently raising fuel prices.

Petroleum Minister Dharmendra Pradhan has blamed "external" factors for the rise in petrol and diesel prices.

"I would like to mention two points, and both these subjects are external. OPEC (Organisation of the Petroleum Exporting Countries) had promised that it will raise production by one million barrels per day, which was not raised," he told reporters in Surat on Sunday.

"Apart from that, crises in countries like Venezuela and Iran are increasing. There is a pressure on oil prices due to decrease in production. Secondly, global currencies have weakened against the US dollar," he said.

Domestic credit rating agency Icra said in a report on Monday that global oil prices have risen by about 10 per cent over the past two weeks on declining inventories and faster than anticipated decline in Iranian exports as the countdown to the enforcement of US sanctions begins.

"While China and EU intend to continue imports from Iran, banking channels and re-insurers are increasingly shying away, leading to sharp cut in purchases. The dual impact of rising oil prices and depreciating Rupee does not auger well for PSU (public sector unit) oil and gas companies as it will increase their regulatory risks," it said. 

"As for the Rupee, it has depreciated by about 11 per cent against the US dollar since the beginning of this calendar year owing to its sensitivity to crude oil prices and significant outflows of foreign investment.

"Due to the high dependence on imports of crude oil to meet domestic consumption, an increase in crude oil prices increases the current account deficit which is weighing down on the Rupee," it added.