From June 4 (yesterday) Indian has increased its petrol and diesel prices. But the impact is not as heavy as in Malaysia. Petrol went up Rupees 5 (about RM .40 cents) and diesel by Rupees 3 (about RM .24 cents. The currency rate is Rupee 1 to Malaysian 0.08 cents. India is not an oil producing country.
Malaysia messed up the Petronas dollars earned and now the people are paying and in a couple of days, will know the full impact when all other prices go up. This morning my fish lady warned me that today is the last day for the normal price of fish, the next time, you have to pay more. It is tough. Please read and download the PDF file on Oil increase.
Prices of petrol and diesel have been hiked by Rs 5 per litre and Rs 3 respectively to curtail losses of state-owned oil firms. LPG prices have also been raised by Rs 50 per cylinder. Earlier, the government cut customs duty on crude oil. The excise duties have also been reduced.
Following the price hike, which would be effective from midnight of Wednesday, the oil prices in different cities have increased accordingly.
Delhi Rs 50.56 Rs 34.80
Mumbai Rs 55.54 Rs 39.12
Chennai Rs 54.64 Rs 37.44
Chandigarh Rs 51.19 Rs 34.69
This was decided at a Cabinet meeting on Wednesday. To further ease the burden on state oil marketing companies, the Reserve Bank of India had earlier allowed domestic oil companies to hedge on crude oil in overseas exchanges and markets.
Crude prices have doubled since the last price hike in February and touched $135 a barrel earlier this month. The oil companies had said that they would be forced to cap oil supplies if the prices were not raised.
The central bank has announced a series of measures to help the oil PSUs, which were left with cash only to meet imports for only 2-3 months. RBI had recently provided more liquidity to oil firms by deciding to buy oil bonds from banks, through its open market operations.
Meanwhile, the Reserve Bank on Thursday doubled the exposure limit of banks to state-run oil-marketing companies, to 30 per cent, to allow the oil companies raise money for importing crude oil.
The ceiling was raised through a circular amending the exposure norms of banks to help HPCL, BPCL and IOC, which are left with cash good for meeting imports for only 2-3 months.