NEW DELHI: Petrol prices are expected to rise by about Rs 3 per litre early next month after the crucial assembly election in Uttar Pradesh, industry executives said on Monday.

Executives in Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum said petrol rates had not been revised for two months despite high international prices due to an informal government directive to hold the price line till elections.

On paper, petrol prices are decontrolled, denying state firms any compensation from the government for below-market sales, but this time, companies will seek compensation as they fear heavy losses because the government informally told them to freeze prices, executives said requesting anonymity.

IOC chairman RS Butola declined to comment on the timing and extent of the petrol price hike, but said the situation was difficult. “The company can’t sustain for long. We will be forced to raise petrol prices if (international) prices prevail at this level ,” he said, after announcing that the company’s net profit rose 52% to Rs 2,488 crore in the quarter ended December 31, from a year ago.

Quarterly profit rose disproportionately because the government disbursed subsidy payments for two quarters simultaneously. In the nine months ended December 31, IOC posted a net loss of Rs 8,716 crore against a net profit of Rs 3,540 crore in the same period previous year.

Director for finance, PK Goyal, said the company will post a net profit for the fiscal year only if it is fully compensated by the government for the January-March quarter. The international price of petrol has risen to about $128 a barrel from $109 a barrel two months ago, when its prices were last revised, he said.

The price of Brent crude oil has risen above $118 a barrel, close to a six-month high. Butola said petrol prices currently were about Rs 3 less than market rates. Butola also said the company was likely to renew its term contract with Iran to import 1.5 million tones a year of crude oil. The company is a relatively small importer of Iranian crude compared to MRPL, HPCL and Essar Oil, which buy large quantities.