Petrol price was on Friday hiked by 41 paise a litre following the government's decision to raise commission paid to petrol pump dealers and firming global oil rates.

Simultaneously, diesel rates were increased by 10 paise per litre due to a hike in dealers commission.

The two increases, which are excluding local sales tax or VAT, will be effective from midnight tonight.

State-owned oil firms, which restrained themselves from revising petrol price for past seven weeks despite weakening of rupee against US dollar, used the government decision to raise dealer commission on the fuel by 21 paise to effectanother 20 paise increase.

Petrol in Delhi currently costs Rs 71.02 per litre and after the increase it will be price around Rs 71.50. The actual rates, which haven't been worked out yet, will vary from city to city.

Diesel rates will go up marginally from Rs 53.67 a litre to about Rs 53.80 in Delhi.

Petrol price, which are normally revised on 1st and 16th of every month based on the global trend in previous fortnight, were last revised on November 1 when rates were cut by Rs 1.15, excluding local levies.

Indian Oil Corp, the nation's largest fuel retailer, said commission paid to petrol pump operators is being raised by 10 paisa on diesel (from Rs 1,089 per kilolitre or 1.089 per litre to Rs 1,186 per kl) and 21 paisa on petrol to Rs 1.95 a litre.

"In addition to above, for petrol, due to strengthening of prices in international markets and slight weakening of rupee, it has been decided to increase retail selling price by Rs 0.20 per litre (excluding state levies)," IOC said in a statement.

Diesel prices were last revised on December 1 following the practice of increasing rates by up to 50 paise a litre every month. Prices in Delhi were hiked by 57 paise, after including VAT, to Rs 53.67 per litre.

Despite monthly increases, oil firms are losing Rs 10.48 per litre on selling diesel at government controlled rates.

Besides loss on sale of kerosene through PDS system stands at Rs 36.20 a litre and that on domestic LPG at Rs 542.50 per cylinder.

"For the year 2013-14, the Corporation is expected to incur under-recovery (or revenue loss) of Rs 74,700 crore on sale of three sensitive products (diesel, LPG and kerosene)," IOC said, adding that the industry (IOC, HPCL and BPCL) would end the year with Rs 143,800 crore loss.

The movement of prices in international oil market and rupee-dollar exchange rate is being closely monitored and developing trends of the market will be reflected in future price changes, IOC added. (PTI / Indian Express)