The petrol prices in India might be increase from the coming month after the state-owned oil companies review the global prices on December 31.

The Oil companies in the country review oil prices every fortnight and make changes to the prices according to the trends. The mechanism came into effect following deregulation of petrol pricing by the government.

The oil companies had slashed prices in the middle of November and again at the beginning of December, bringing some relief to the residents. Even as the crude oil prices have remained stable the value of rupee has depreciated significantly against the US dollar in recent weeks, pushing up cost of importing the fuel from international markets.

The oil companies are now spending more the pay for imports in dollars and thus might have to increase the retail prices in the country. According to industry insiders, there is a shortfall of about 85 paise per litre currently in the markets. However, after accounting for taxes, the desired increase would be around Rs1.02 per litre.

Even as the oil companies are free to determine the price, they still have to take ‘advise’ from the petroleum ministry before announcing any changes to the retail prices in the country. The oil companies will only roll out an increase after taking the government’s consent on the matter.