State-run fuel retailers will raise fuel prices by 50 paise to Re 1 per litre in one go from April to recover investments made for producing Bharat Stage-VI (BS-VI, akin to Euro-VI standard) petrol and diesel.
“I don’t think premium (for BS-VI fuels) will be large enough for it to be staggered,” Sanjiv Singh, chairman of the country’s largest oil refiner and fuel retailer Indian Oil, said on Thursday after announcing trebling of the company’s net profit in the December quarter to Rs 2,339 crore.
Pump prices are linked to petrol and diesel rates in regional trading hubs — Singapore and Dubai — as well as the rupee-dollar exchange rate. Since international benchmark prices for BS-VI equivalent fuels are higher, domestic rates will also have to rise. “We are in the process of working out the implications of supplying BS-VI fuel from April,” Singh said.
State-run companies appear to have received a nod from the parent oil ministry for a one-time increase, using the window provided by benign benchmark prices and no state elections in sight.
Crude prices are in the comfort zone and product prices are expected to face deflationary pressure as coronavirus casts a shadow over trade, air traffic and global economic growth revival in general.