Petrol and Diesel prices to increase due to the BS-6 Era
A Premium on BS6 fuel will be charged to recover the investment done for the production of less polluting fuel.
As per the approval, BS 6 petrol and diesel will most probably be offered with a hike by Rs.0.80 and Rs.1.50 accordingly.
To reach the BS 6 levels, public sector companies have spent around Rs.80,000 crore.
According to media reports, the government is considering a proposal in which it will allow the oil companies to charge a premium on retail prices for petrol and Diesel. This will help the recover the investment done in producing less polluting fuel. In addition to this, the media reports also indicate that the public and private sector oil marketing companies had appealed to the petroleum ministry to help them in assisting with the hike in fuel prices so that it will help them recover the cost in upgrading the refiners.
With this, consumers will be facing the hike in fuel prices if the proposal is accepted by the government. In accordance with this, if the proposal is accepted, consumers might face a hike of BS6 petrol and Diesel prices by Rs 0.80 and Rs 1.50 respectively for the next five consecutive years. Also, the media reports state that the global market has largely been flat for the past several months due to the decrease in demand. Hence this has also affected the retail prices for petrol and Diesel on many occasions.
Public sector companies such as Indian Oil, Hindustan Petroleum and Bharat Petroleum have invested around Rs 80,000 crore to upgrade their oil refineries to meet the demand of BS6 fuel. This comes after the rolling out of BS 4 complaint fuel from April 2017. In addition to this, even private refiners such as Essar oil and Reliance industries have made considerable investment in upgrading their oil refineries from BS 4 to BS 6 compliant fuel.