With the rising prices due to the rising prices of crude oil, in view of the rising prices and in Karnataka elections, the government oil marketing companies kept petrol and diesel prices unchanged for 20 days.
Oil PSUs, who had kept rates unchanged for almost three weeks before Karnataka went to polls despite input costs spiking, reverted to daily revision in prices no sooner had the state voted to elect a new government on Saturday.
The price of petrol has been hiked by 17 paisa per litre, while that of diesel by 23 paisa per litre. Petrol prices also rose to Rs74.80 per litre on Monday, the highest since they were raised to Rs76.06 per litre on 14 September 2013.
"Around a million barrels of oil a day is likely to disappear from global oil markets if the USA sanctions on Iran bite", said Greg McKenna, chief market strategist at futures brokerage AxiTrader in the report.
State-owned oil marketing companies are estimated to have lost about Rs 500 crore as they absorbed higher cost resulting from the spike in global oil rates and fall in rupee against the U.S. dollar.
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Petrol and diesel prices were last revised on April 24 when they were hiked by Rs 0.
No changes in the prices of petrol or diesel were made since April 26 because of the recently concluded Karnataka Assembly elections. We can expect further price hikes in the coming days. The rupee has fallen to 67.23 per USA dollar, which is at its lowest since February 8, 2017.
The government had in June 2010 freed petrol price from its control and the diesel rates were deregulated in October 2014.
The Centre's Narendra Modi government had announced it was freezing the prices of petrol and diesel on 1 May even though benchmark global rates have gone up by nearly $2 per barrel.
Officials privy to the development said the government's stiff stance on the excise duty cut could be revisited soon if global crude prices continue to move north.