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02 December 2023

India to raise petrol prices by 4.5%

By Reuters

India's state-run fuel retailers will raise petrol prices by about 4.5 per cent from Sunday, sources at the companies said, putting increased pressure on wallets as the country battles the highest inflation of any major Asian economy.

India is beset by rising food and fuel prices, and the central government has come under increasing criticism for failing to implement major structural reforms to control rapid inflation, which has hit hundreds of millions of poor people.

Sources at each of the three companies said Bharat Petroleum Corp would raise the petrol price by Rs2.53 (5.5 US cents) a litre, Hindustan Petroleum Corp by Rs2.54 a litre, and Indian Oil Corp, India's biggest fuel retailer, by about Rs2.50 a litre.

The sources said the price increases were needed due to rising global crude oil prices.

In June, India allowed fuel retailers to set petrol prices, but the prices of diesel and cooking fuels are set by the federal government.

The wholesale price index (WPI), India's main inflation gauge, rose an annual 8.43 per cent in December, after a rise of 7.48 per cent in November. India's fuel inflation rose to 11.19 per cent in December from 10.3 per cent in November.

Indian firms in December raised petrol prices by up to 5.6 per cent, the biggest rise in six months, to protect their margins from high crude prices.

But New Delhi last month deferred a hike in diesel and cooking fuel prices that would have eased the government's subsidy burden but would have aggravated inflation and added to voter discontent.