Indian Oil Corp (IOC), the country’s largest fuel retailer by sales, has hiked petrol price by Rs 1.50 paisa per litre and diesel prices by 45 paise per litre with effect from midnight tonight.

As per government data, fuel retailers are currently suffering a revenue loss of 1.23 rupees a litre on retail sales of petrol. IOC says the revenue loss on diesel sale to now fall to Rs 10.27 per litre. It sees the FY13 revenue loss on subsidized fuels at over Rs 86,000 crore.The government had said last month it would allow fuel retailers to raise the price of subsidised diesel by 0.40 rupees-0.50 rupees a litre every month and asked bulk buyers to pay market rates.

Petrol price in Delhi will go up by almost Rs 1.80 per litre after taking into account 19 per cent VAT. Diesel rates would go up by 51 paise. New rates for petrol in Delhi would be Rs 69.05 per litre, while a litre of diesel will cost Rs 48.16. Petrol price was last revised on January 18 when the price was cut by 30 paise to Rs 67.26 a litre in Delhi.

The reduction in rates on that day coincided with the government decision to give oil firms freedom to raise diesel prices in small monthly dozes to eliminate all of the losses on the fuel. Oil firms hiked diesel price on that day by 50 paise to Rs 47.65 a litre in Delhi.

Crude oil price has increased from USD 109.08 per barrel to USD 113.24, while international gasoline or petrol prices have risen from USD 119.59 a barrel to USD 128.57.

State-owned companies have been “compelled to pass on the increase in petrol prices to consumers as the they have already suffered losses on sale of petrol so far and trends in international  market for oil as well as rupee-US dollar exchange rate indicate continued strength.”

In fact, currently petrol prices are hovering around USD 132.80 per barrel. “The trends of international oil prices and INR-USD exchange rate shall be closely monitored and the same shall be reflected in future price changes,” IOC said in statement.