Indian Oil Corporation ( IOC ) to raise petrol prices in India

Indian Oil Corporation, India's largest oil firm, may increase petrol prices all throughout the country. The exact increase that can happen is not known currently. Average per liter price is Rs: 65/- in India +- Rs:4/- according to the various cities. It is estimated that IOC makes a loss of about Rs:7/- per liter currently. Add tax to it and it makes about Rs:7.50/- loss considering the current price. If the prices are increased by anything more than Rs:5/- per liter than that is going to disturb the environment nationally. Prices are regulated by the government and common public in India blames the government for any fuel price rise without knowing that global prices are actually very high than what we get in India. The government and Indian oil companies always try to keep a balance but oil companies just cannot keep making losses, some or the other time the burden has to pass to the people who are actually using the vehicles.

IOC was losing Rs 297 crore per day on selling diesel, domestic LPG and kerosene at the government controlled rates. IOC is losing about Rs:18/- per litre on diesel, Rs 28/- per litre on kerosene and whooping Rs:315/- per LPG cylinder (14.2 kg domestic cylinder). The total debt of IOC was around Rs:53,000/- crore at the end of March, 2011 and is growing at the rate of Rs:5,000/- crore per month! This cannot continue forever! Price rise is the only solution.  Is there any else?

Inflation eases to 13-month low, at 4.28%

The wholesale price index-based inflation declined sharply to a 13-month low at 4.28 per cent for the week ended June 9, down from 4.80 per cent in the previous week.

Inflation was at 5.29 per cent in the corresponding period of the previous year. Higher comparative prices last year during the same week (the base effect) and a decline in prices of primary food articles contributed to lower wholesale inflation.

Finance Minister P Chidambaram attributed the fall in inflation to monetary tightening by the Reserve Bank of India, but said, “It is too early to draw any conclusion. We need to watch inflation in the next 4-5 weeks”.

Analysts agree with Chidambaram’s views. “Various measures taken by the RBI and the government have started yielding results. However, market remains concerned about prices of primary articles,” said Arun Kaul, general manager (treasury), Punjab National Bank.