New Delhi, May 14
A day after the verdict on five key state Assemblies was pronounced, the state-owned oil companies today hiked petrol prices by around Rs 5 per litre with effect from midnight tonight. There have been nine hikes since last June when petrol was deregulated.

The increase is one of the steepest in many years and next on the agenda will be hike in prices of diesel, cooking gas and possibly kerosene which are still regulated and require a nod from the Empowered Group of Ministers (EGoM). The oil firms had been holding the hike in petrol prices since January even though crude oil had touched a two-and-a-half-year high of more than $120 per barrel.

IndianOil, Bharat Petroleum and Hindustan Petroleum will hike rates between Rs 4.99 and Rs 5.01 per litre in Delhi with effect from midnight tonight. Petrol in Delhi currently costs Rs 58.37 per litre which will go now be at Rs 63.37 per litre.

The government had freed petrol price from control in June but the state-owned oil firms still look for a nod from the Oil Ministry and prices were not raised in the run-up to the Assembly elections. While the Opposition will sharpen its attack against the UPA government given the fact that inflation is already hurting the people, the stance of the new incoming Chief Ministers, Mamata Banerjee in West Bengal and J Jayalaithaa in Tamil Nadu, will be watched closely.

There have been nine hikes in petrol prices since last June, which is seen as an urban fuel and less sticky politically, as oil prices have galloped and the last one was in January. With these hikes, the differential between petrol and diesel is going on increasing.

Oil Ministry sources said the under-recoveries for oil companies on account of fuel will go upto a whopping Rs 2 lakh annually at current crude oil rates of around $120 a barrel. The Oil Ministry has given a status of the under-recoveries and various options for the EGoM to take a call.

The shortfall on diesel is Rs 16, on LPG it is Rs 330 and it is pegged at Rs 24 for kerosene. Diesel prices have not been raised since June unrest in the Middle East has set fire to global oil prices. The meeting of the EGoM, to decide on diesel and cooking gas price hike, was deferred. The group is likely to consider raising diesel price by Rs 3-4 a litre and LPG rates by Rs 20-25 per cylinder. Diesel, LPG and kerosene are not deregulated and for that the EGoM has to decide but petrol has been deregulated and oil firms can decide on hikes although the decision requires a government nod.