State-run, Oil Marketing Companies in India are expected to increase the price of petrol in the country by about Rs. 1 from June 1due to the depreciation of the rupee during the previous one month.

Petrol prices have been falling in the country since March due to a downward trend in the global crude oil prices. This time the rise might be based on the weakening of the rupee even as the crude oil prices have large remained stable because it made imports costlier for oil importers. The increase will be first rise in the price of petrol in the country in three months.

Under the current mechanism, 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. 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. 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. Any increase in the price would be followed by government consultation.