Under the current market conditions, oil marketing companies are under extreme pressure due to the weakening of the Indian rupee. The companies are now looking to hike the prices of petrol by Rs. 1.5 to Rs. 2 per litre, which will take effect from Friday, June 14, 2013 at midnight. Sources familiar with the development said that the hike in prices is very likely, as the oil companies are facing an increased pressure, as they are hit by Rs. 20,000 crore of under-recoveries due to the depreciation of the Indian rupee in the last four weeks.
In recent times, the Indian rupee has been facing a constant downfall and slipped to a record low of 58.96 in intraday trade on Tuesday, June 11, 2013, against the dollar. During this week alone, the Indian rupee has taken a plunge of almost 3 percent. Analysts have said that the absence of intervention of Reserve Bank of India, rushing to cover dollar needs and exporters declining to sell dollar are some of the reasons that are impacting the Indian rupee.
Nitya Balkrishnan, who is reporting on this current situation, said that every slide in the Indian rupee causes the increase of Rs. 9,000 cr in under-recoveries and to soften the blow, the oil companies do not have any other choice than to increase the prices of the fuel.