Ahead of Bihar assembly elections, state-owned oil companies have apparently decided not to increase fuel prices, though factors governing the oil market "necessitated" a hike in petrol prices by Rs 1 per litre and in case of diesel, by Rs 2.28 a litre.

IOC, BPCL, and HPCL revise petrol and diesel prices every fortnight based on global crude oil prices and rupee movements.

But the companies opted not to revise oil prices on 15 September, PTI reported.

"There will be no change in retail price this week," said an official at one of the three retailers, without citing any reason.

Had the companies announced a hike in fuel prices, it would have been the first increase in the last four months.

According to industry sources, the average price of gasoline price, a benchmark for petrol prices in India, had increased to $61.42 per barrel this month from $60.15 in the second half of August.

Besides, there was a sharp depreciation in rupee against the US dollar between 1 and 15 September amid weakness in domestic equities. The rupee averaged 66.37 against the greenback in the first half of this month, compared to 65.70 during the 16 to 31 August period.

The overall impact of rise in gasoline prices and rupee weakness had resulted in increase in cost of petrol at refineries by 79 paisa per litre; consequently, the retail price of petrol should have gone up by 98 paisa a litre in Delhi after taking taxes into account. 

Likewise, diesel prices should have been hiked by Rs 2.28 per litre in Delhi, considering a rise in international diesel prices to $60.78 per barrel from $56.55.

Apparently, the state-run oil companies are refraining from hiking fuel prices despite an increase in cost of refining, because of the Bihar Assembly elections. The multi-phased polls starting from 12 October will be a major test of Narendra Modi government's popularity.