Indian Oil Corp, India's largest state-owned oil company, has hiked the price of petrol by Rs 1.40 per litre, excluding taxes, effective midnight.
Excluding taxes, the fuel will now cost Rs 70.46 in Delhi, Rs 77.99 in Kolkata, Rs 77.29 in Mumbai and Rs 73.57 in Chennai.
In a statement announcing the hike, the company cited high international crude prices and a falling rupee for the action.
"International prices have increased from $128.57 a barrel to $131.00 a barrel since the last revision, and the rupee has depreciated from Rs.53.43 to Rs.54.15 per US dollar during the period," Indian Oil said in a statement.
This is the second hike in over two weeks -- the price was hiked by Rs 1.50 on February 15.
The price hike is the 21st for petrol since the fuel was deregulated. Under deregulation, oil firms are free to decide the quantum and the frequency of a price hike. Since petrol prices were decontrolled in June 2010, they have been revised 28 times (increased 20 times and decreased eight times).
State-owned oil firms lose about Rs. 450 crore every day from having to sell diesel, cooking gas (LPG) and kerosene at subsidized rates. For the full year, their total losses are estimated to be more than Rs. 1,50,000 crore.
However, these companies are compensated for their losses from the Finance Ministry and their sister upstream PSUs such as Oil and Natural Gas Corporation, GAIL and Oil India.
India is largely dependent on imports for its fuel needs. It imports 80 per cent of the crude it refines, about 3.7 million barrels per day.
In order to minimize its dependency on imports by 2030, the Oil Ministry has proposed to set up a committee under Vijay Kelkar, former advisor to the Finance Ministry, which will submit a proposal in two months. Mr Kelkar also heads a committee on fiscal consolidation that had suggested an increase in fuel prices and the deregulation of diesel.