Petrol prices hiked by Rs 2.96

BRACE up to pay more for your petrol. Bharat Petroleum Corporation (BPCL) has raised

petrol price by Rs 2.95 per litre effective Wednesday, while Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation (HPCL) will follow suit with an increase of Rs 2.96 per litre a day later. This is the highest price hike after government freed petrol prices from its control in June this year.

Further, the government is likely to take a call on diesel price hike next week.

An empowered ministerial group headed by finance minister Pranab Mukherjee is likely to meet next Wednesday to decide on a possible increase in diesel price. Oil secretary S Sundareshan told last week that OMCs are incurring a loss of Rs 4.80 on every litre of diesel sold.

Oil minister Murli Deora said on Tuesday, "eGoM will take a view on this (diesel price hike). We are trying to ensure that the price hike is minimal."

The hike in retail price of petrol is being attributed to spurt in global crude oil price. Crude has surged by more than five per cent in the last 10 days. Crude futures for January 2011 traded on New York Mercantile Exchange (NYMEX) have surged from $ 84.11 per barrel on November 30 to around $ 88.69 on Tuesday.

Country's largest oil marketing company, IOC has revised petrol prices six times since June. Petrol prices have gone up from Rs 51.43 in New Delhi on June 26 to Rs 52.91 per litre till Tuesday.

Jayant Manglik, president at Religare Commodities Limited indicated that crude oil is currently trading at a strong resistance level of around $ 90 per barrel in futures. "If it can sustain a level of more than $ 91 per barrel, then it is likely to shoot close to $ 100 per barrel in the first few months of 2011," Manglik added.

Depreciation of US dollar and surge in Chinese demand are the major drivers for spurt in global crude prices, said Manglik.

Consumption in the world's fastest growing economy China has gone up by 14 per cent in November when compared to a year ago period.