Bengaluru: Diesel and petrol prices that have remained stagnant for the past two weeks are likely to see a spike once the Karnataka election is over. In normal circumstances, the increase in international crude oil prices and weakening rupee in the past two weeks would have seen a rise in petrol prices by approximately up to Rs 2 per litre. But that’s not happened, as oil companies have reportedly soaked in the cost ahead of the poll. Though the government has denied having any role to play in this, oil companies often freeze fuel prices before polls. The petrol and diesel prices are stuck at Rs 74.63 and Rs 65.93 since April 24.
Fuel prices have been deregulated in India for years and companies can set the retail price on the basis of global price and custom, excise duty, state VAT, freight, etc. An Economic Times report suggests the price build-up for petrol and diesel since April 25 at BPCL’s Delhi Filling station, including actual cost and freight charges, went up by $2.9 a barrel and $2.64 a barrel, respectively. The rupee also depreciated by Rs 1.26 in the period. With that, the petrol and diesel prices also surged by Rs 1.84 per litre and Rs 1.78 per litre but the oil company kept the price unchanged.
On Wednesday, IOC (Indian Oil Corporation) Chairman Sanjiv Singh said the oil PSUs’ decision to freeze fuel prices was aimed at stabilising, and that it incidentally coincided with the Karnataka election. He reasoned that the fuel prices saw the daily spike from 25 paise to 35 paise, resulting in the change in fuel prices by Rs 2 or Rs 3 every 15 days. “This was unrealistic. So, we thought of stabilising that, tapering it down to a certain extent. Now incidentally it coincided with some of the state elections. It was not the intention (of oil marketing companies),” he said.
Petrol and diesel prices have been riding a 55-month high trajectory in India, with crude oil crossing the $75 per barrel mark. However, there are chances that the prices will see some variation after the Karnataka election. Economic Affairs Secretary Subhash Chandra Garg recently hinted that there’s a possibility of fuel prices coming down in a few days. The Opposition has been clamouring the government has directed state oil companies to not raise prices, but Oil Minister Dharmendra Pradhan in April had junked the reports.