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Economy Sep 1, 2013

IOC raises petrol, diesel prices, blames hike on weak rupee

By Firstbiz Staff

Indian Oil Corp , the country's biggest refiner, today raised petrol prices by 4 percent and diesel by 1.1 percent as weakness in the rupee made the fuels costlier to import.

India's three state-run fuel retailers - IOC, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp - tend to move their prices together.

India deregulated gasoline prices in June 2010.

The new prices will be effective from midnight Saturdayafter a week which saw country's currency sink to a record low around 69 to the dollar.

"The INR-$ exchange rate has deteriorated sharply, from Rs 59.49/$ to Rs.63.88/$ during current pricing cycle, necessitating this price increase," IOC said in its statement.

In addition to the "extremely volatile" exchange rate, the "geopolitical situation in the Middle East is leading to pressure on international oil prices as well", the company added.

India, the world's fourth-largest oil importer, is scheduled to go to the polls by May next year with inflation, which has often climbed to double figures in recent years, one of the main issues troubling voters.

The government has partially deregulated petrol and hiked diesel prices in an effort to contain ballooning debt caused in part by fuel subsidies.

Agencies

by Firstbiz Staff

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