Oil Prices Might Go Up Again

Thought we have had enough..? Wait there is more…! Hindustan Times reported another possible oil price hike by this month end. Global crude oil prices continue to hover around $ 110- $ 115 per barrel which has made it almost mandatory for companies like Indian Oil, Hindustan Petroleum and Bharat Petroleum to increase the price of oil as soon as possible to minimize the losses incurred.

The quantum of increase could be as huge as Rs 3 for petrol which would set back the general public for sure. The government, however, is not ready to increase the price of diesel and cooking gas at least till elections fearing a backlash from the general public. It must be known that petrol prices have been deregulated by the government which means that oil companies can decide upon their own prices. However the government has kept a provision according to which they would only intervene in case the petrol prices go exorbitantly high. However diesel, kerosene and cooking gas prices are still regulated and kept under control by our government and it compensates for them at fluctuating crude prices.

Government deregulated petrol prices on 26th June 2010 and after that petrol prices have gone up by 13-14% in a span of 8-9 months with another hike hanging on the neck. The last hike was on 15 January 2010 where the quantum of increase was Rs 2.5. However, it must be noted that not only India is facing this problem but world over there is shortage of oil which is pushing up prices. We must reduce our dependency on our current non-renewable resources else we might have cars in our garage but no oil to fuel them!

– Saad Khan