State-owned oil companies increased petrol and diesel prices by around Re 1 per litre, effective midnight tonight, in step with the $5 a barrel surge in global crude oil prices.

Petrol would cost Rs 29.93 per litre in Delhi as against the prevailing Rs 28.91 a litre while diesel prices has been increased from Rs 18.06 to Rs 19.07 per litre, official sources said.

The hike comes close on the heels of up to Rs 1.50 per litre cut in prices of petrol and diesel, in two installments, in the month of November.

Petrol prices in Kolkata have been hiked by Rs 1.02 to Rs 31.44 per litre while in Mumbai a litre of petrol would now cost Rs 34.73 as opposed to the prevailing Rs 33.63.

Chennai will see a Rs 1.10 per litre increase in petrol prices to Rs 32.55.

Diesel prices in Kolkata increased from Rs 19.43 to Rs 20.45 per litre. In Mumbai, the hike was of Rs 1.21 per litre to Rs Rs 24.24 while in Chennai diesel prices rose from Rs 19.43 per litre to Rs 20.93 per litre.

In accordance with the mechanism evolved by oil companies to review prices of petroleum products every fortnight after the dismantling of the Administered Pricing Mechanism, officials of Indian Oil Corporation, IBP, Bharat Petroleum and Hindustan Petroleum met on Thursday to match retail prices of motor spirit and high-speed diesel with import parity price, sources said.

The average procurement cost of Indian basket of crude oil was $27.04 a barrel in December as opposed to average cost of $23.90 per barrel in the second half of November.

It was $28.13 a barrel in the second half of December, based on which Thursday's price revision took place.

Indian basket of crude had averaged $23.72 a barrel in the first fortnight of November, sources said adding the November average procurement price came to $23.60 a barrel.

As per the mechanism evolved after the dismantling of APM this fiscal, oil companies are to fix consumer retail price for petrol and diesel on the 1st and 16th of every month based on the average procurement cost of crude during the fortnight.