NEW DELHI: State oil companies have not revised prices of petrol and diesel for almost a week in an apparent suspension of their freedom to alter prices daily in line with fluctuations in international fuel and exchange rates. Prices of petrol and diesel have remained unchanged at Rs 74.63 and Rs 65.93 per litre, respectively, at Indian Oil filling stations in Delhi since Tuesday through Sunday, even though international fuel rates and the currency fluctuated every day. State companies had previously kept prices unchanged during April 16-19. Shares in Indian Oil, Bharat Petroleum and Hindustan Petroleum — that control more than 90% of fuel retailing —have lost 9-16% since April 11, when a media report said the government had asked oil retailers to hold rates and absorb part of the hike ahead of Karnataka polls.
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The government as well as the state oil companies have repeatedly denied any such directive but analysts are barely convinced, given the disinclination among oil firms to revise prices lately. Petrol and diesel have been decontrolled for years in India but it is widely believed that the government nudges oil companies to go slow in raising prices before elections, and companies make up for the loss by sharply increases afterwards. Government controlled companies synchronise their pricing efforts, keeping rates at their respective pumps within a few paise of each other. The rates are also a guide for private players such as Reliance or Essar Oil. Price of crude oil, and consequently, that of petrol and diesel has been flaring lately in the international market due to a combination of factors including healthy oil demand, supply cut by key oil producers and fears of US sanctions on Iran, a big oil producer. Crude oil is trading close to $75 a barrel, up 55% since July 1. Prices of petrol and diesel too have risen by Rs 11.54 per litre and Rs 12.6 per litre in Delhi since July 1 last year. But recently, oil companies have halted price revision despite regular changes in the international rates.