Oil marketing companies have raised petrol and diesel prices by Rs. 1.69/litre and Rs.0.50/litre respectively with effect from Jul. 1, 2014.

"Due to geo-political unrest in the Middle East, there has been significant increase in International Oil prices during the past two weeks. The international prices of MS have increased by more than USD 4/bbl, and the INR-USD exchange rate has also deteriorated. The combined impact of both these factors has warranted an increase in Petrol prices by Rs. 1.69/ litre (excluding state levies)," Indian Oil Corporation (IOCL).

In addition to above, in pursuant to GOI order dated 17th Jan'13, OMCs have been authorized to increase the retail selling price of Diesel within a small range every month until further orders. Accordingly, since then, retail diesel prices are being revised every month. In continuation of above, oil marketing companies have increased in retail diesel prices.

Even after the current increase, under recovery on retail diesel shall stand at Rs. 3.40/litre, IOCL said.

Further, oil marketing companies continues to suffer under-recoveries on sale of SKO (PDS) of Rs.33.07/litre and LPG (Domestic) of Rs. 449.00/cyl.

For the year 2014-15, oil marketing companies are expecting under-recovery of around Rs 1,078.50 billion on sale of three sensitive products.