Costing dear

This should be a bad beginning. Of course hike in petrol price is not anything new now. But in its steepest hike so far, the price of petrol per liter will leak additional Rs 5 from your pocket. Yes, this is getting worse and that day wont be very far away when we have to pay 100 bucks per litter. Anyways, it is time we spent a silent moment before we turn the ignition on.

The last price hike was in January, when oil companies had raised the price by four to two percent. Thus, in the last nine months, the price of petrol has increased from Rs.47.93 per litre to Rs.68.33 – through nine revisions.

The price increases were needed due to rising global crude oil prices. In the last two decades fuel prices have escalated, in keeping with variables such as sales tax revisions, effective retail price of crude and increase in local levies.

Following are the revisions since 1989 in the retail prices of four key petroleum products in the national capital.

On April 1, 1989, petrol prices were at 8.50, kerosene at 2.25, diesel 3.50 and LPG 57.60. Within five years (Februry 2, 1994), both petrol and diesel prices almost doubled to 16.78 and 6.98.

The year 2000 saw a huge jump in LPG prices from Rs 146 to Rs 196.55 the tune of almost Rs 50 followed by a Rs 36 hike in five months to Rs 232.25.

The next five years saw a gradual hike in Petrol and diesel prices. The diesel price rise followed a steeper pattern than that of petrol. In 2005 fuel prices were increased twice with both petrol and diesel prices revised at 43.49 and 30.45 in September.

The next five years marked a steep rise in LPG prices which touched 346.30, rolled back in January 2009 to 279.70. LPG prices were raised again in April 2010 followed by a hike in June 2010 revised at 345.35. From 2005 to 2010 petrol prices were raised by Rs 15 and diesel roughly by Rs 9.03.

In June 2010 the pro-reform government deregulated petrol prices and even though it retained control over diesel, prices are hiked more than expected.

The price increases could bring indirect benefits to the government. The oil ministry calculated higher prices will more than halve the losses of state-run oil marketing firms to about $ 11.4 billion in the year ending March 31, 2011.

From July 1 – Sept 21 a series of gentle increments by companies brought petrol prices to 51.83 rupees per litre by Sept. 1, up less than 1 percent since the jump at June deregulation.

In December, 2010 the biggest hike since deregulation, of 5.6 percent, propelled petrol prices over 53 rupees per litre, as global oil prices hover around $ 90 per barrel.

Another five months in 2011 saw the petrol price nearly touching Rs 70 mark!