New Delhi: Petrol and diesel prices on Sunday scaled new highs as rates were increased on account of rupee depreciation and rise in international oil rates.
The revised price of petrol in Mumbai was recorded at Rs 89.29/litre. The diesel price also jumped 19 paise per litre and touched Rs 78.26/litre, the highest ever in Mumbai, according to a price notification issued by Indian Oil Corporation (IOC).
Petrol in Delhi now costs Rs. 81.91 per litre (increased by Rs 0.28/litre) and diesel is priced at Rs. 73.72 (increased by Rs 0.18/litre) a litre.
According to experts, the surging diesel prices over the past one month are likely to lead to a 50-to-60 basis points (bps) sequential dip in operating margins of telco biggies Vodafone Idea (VIL), Bharti Airtel, among others.
Diesel prices have risen about 7 percent since August 1.
“The telecom companies are now facing a dual problem. On one hand they cannot raise call rates to pass on the pressure to consumers and on the others they also cannot continue with rising operating costs. It’s a fix that the telcos will take some time to recover from,” said a top government official on condition of anonymity.
The telecom industry is significant buyer of diesel and is estimated to run up annual spends of nearly Rs 9,000 crore to consume some 200 crore litres of the fuel. Another official raised the concern of roughly 2 percent dip in quarterly revenue for telcos if fuel prices do not stabilise. This comes at a time when the sector is already reeling under nearly Rs 8 lakh crore of debt.
Experts are of the opinion that petrol and diesel prices will surge further due to lack of supply in the global oil market. “In the near future we can expect fuel prices to go further up, especially due to the geopolitics involving Iranian oil that is obviously creating a shortage of oil in the market,” said Jaijit Bhattarcharya, Partner, KPMG.
India is currently facing the dual problem of constantly depreciating rupee as well. The burgeoning problem of currency is coupled with India’s current-account deficit at a five-year high, elevated oil prices and an emerging-market sell-off. This has resulted in rupee becoming the worst performing currency in Asia, registering a fall of almost 9 percent starting March this year.
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