NEW DELHI - Unstable international oil rates may force the Government of India to increase petrol price by Rs 2 a litre and diesel by Re 1 per litre, unless excise duty on both the fuels is cut to neutralise the increase.

According to reports, state fuel retailers- Indian Oil, Hindustan Petroleum and Bharat Petroleum- incur a loss of Rs 135 crore per day on sale of petrol, diesel, LPG and kerosene. While their annual revenue loss for current fiscal is estimated to be at Rs 38,700 crore.

“The basket of crude oil India imports has averaged $70.49 per barrel in the second fortnight of June against the May average of $58, sending alarm bells ringing,” said a petroleum ministry official.

“We have to act to save our PSU. The burden of rising global oil prices has to be shared equally between the companies, the government and consumers,” he added.

PSUs lose Rs 2.96 a litre on diesel and Rs 6.08 per litre on petrol.

“One-third of this or Rs 2 per litre on petrol and Re 1 on diesel can be passed on to consumers. Rest of the losses would be covered by issue of government bonds to the retailers and subsidy sharing by upstream firms like ONGC,” he said.

Currently, petrol attracts an excise duty of Rs 11.35 per litre and diesel Rs 1.60 a litre. Apart from this another Rs 2 a litre is charged as road cess on the two fuels.

“If the finance minister Pranab Mukhejree cuts excise duty on the two fuels, consumers can be spared from price hike,” he said. (ANI)