Due to weak Indian Rupee and high international crude prices, State owned oil companies IOCL, BPCL & HPCL have raised the petrol prices by Rs. 2.61, effective midnight. After adding local taxes, the hike needed at retail level comes to over Rs 3 per litre.
Petrol price was freed from the government control in June last year but the retail rates have not moved in line with cost as high inflation rate forced the oil companies to seek 'advice' from parent oil ministry before revising rates. Petrol price were last hiked by Rs 5 per litre on May 15.
By this hike the passenger car manufacturing companies will face the maximum brunt as they are already sufferring from a significant demand slowdown due to high interest rates and on top of that petrol prices keep going up which will bring down the demand even further.
Maruti Suzuki and Tata motors are expected to open weak in Friday's trade in India