New Delhi, Nov. 4 (NNN): In the wake of surging international crude oil prices,petrol price is likely to be hiked by Rs 1.50 per litre and diesel by Re 1 from midnight on Thursday.
A decision on the hike was expected to be taken at the meeting of cabinet committee of economic affairs this evening, the sources said.
Petrol and diesel prices have not been hiked for over three months now, while LPG prices were last raised on June 15.
Petrol is currently being sold at Rs 2.20 per litre below the imported cost while diesel is priced at Rs 4.15 per litre below cost.
LPG is underpriced by Rs 158 per cylinder and kerosene prices which have not changed in the past 30 months, is being sold at Rs 11.76 per litre lower than the imported cost.
Earlier on Wednesday, the union government had deferred a decision on hiking prices of petrol, diesel, LPG and kerosene.
It had decided to review the situation later and decided on the issue within the next 24-48 hours, this was announced by Finance Minister P Chidambaram after a meeting of the Cabinet Committee on Economic Affairs (CCEA).
A final decision on the matter could not be taken due to the absence of Agriculture Minister Sharad Pawar, Defence Minister Pranab Mukherjee and Railway Minister Lalu Prasad Yadav from the meeting.
The prices of petrol and diesel were last revised on August 1.
The non-revision in the prices have cost the oil companies about Rs 10,000 crore in revenues in the first half of the current fiscal year.
The 33 per cent rise in the cost of crude oil since August 1 require petrol prices to be raised by Rs 1.22 a litre and diesel by Rs 2.24 per litre.
Oil Prices: Globally, the oil supply chain is operating with a thin margin for error and that is the underlying reason that prices are more than 70 per cent higher than a year ago, analysts say.
Light crude for December delivery settled down 51 cents at $49.62 on the New York Mercantile Exchange on Tuesday.
Brent crude for December delivery was down 21 cents at $46.85 on the International Petroleum Exchange in London.
Alaron Trading Corp analyst Phil Flynn said the sharp drop in prices from a week ago was due to expectations that the nation's heating oil supply would soon begin to build to more comfortable levels.
"We were a little ahead of ourselves at $55 and we've corrected a little bit," said Flynn. A record Nymex closing price of $55.17 per barrel was reached October 22 and matched four days later.