The government on Wednesday hiked the price of petrol by Rs 4 per litre and diesel by Rs 2 per litre in view of the recent spike in crude prices. The fuel price hike would be effective from midnight today.
However, the prices of domestic LPG and kerosene distributed through the public distribution system have not been hiked.
Oil prices climbed over $71 a barrel on Wednesday as a drop in US crude inventories suggested demand might be picking up. This is more than the double the March lows of $35.
Earlier, Oil Minister Murli Deora had met the Prime Minister on rising global oil prices.
The oil secretary R S Pandey, said that the government will bear the entire under recovery of Rs 30,000 crore on cooking fuels. Welcoming the price hike, upstream oil producer ONGC said the price hike was needed by the industry and it expects further rationalisation of fuel prices.
Pandey said that if crude prices fall, the fuel prices will be cut accordingly.