India is going to start the new year with a hike in petrol prices.
Oil companies plan to raise petrol prices by about Rs. 2.25 a litre from Sunday January 1 unless the government asks them to defer the move in view of assembly elections.
Oil companies revise petrol prices every two weeks but in the middle of this month, the government told state firms to refrain from any increase as the move could cause uproar during the winter session of Parliament. As a result, the price rise would be relatively steeper as oil firms need to make up for the losses.
The government allowed state oil firms to align petrol price with international rates from June 2010, but companies always informally consulted it before taking any pricing decisions.
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum raised domestic retail prices of petrol by Rs 1.80 a litre on Nov 4 in Delhi. They cut the price by Rs 2.22 per litre and Rs 0.78 a litre in the following two fortnights.