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xcise Act, any contribution made to the Road Development Authority, the Operational expenses incurred by the Corporation, contribution for hedging purposes, contribution for subsidizing liquefied petroleum gas, rice and flour, funds available in PSA, any expense incurred in connection with the operation and marketing of petroleum products, any value added tax payable and any retail margin allowed.

Between December 2010 and January 2011, the price of crude on the world market fell from $91 to $89. Despite of this, an increase of Rs3.80 for petrol and Rs4.40 for diesel was noted at the pump.

The fluctuations in the world prices which occurred between December and January probably reflect this increase. However, there was no detailed shown on the contract signed between Mangalore Refineries and the STC, therefore it is difficult to understand the price mechanism which they had used. Moreover, as oil is paid in dollars, so far the currency was more or less stable.

Due to lack of transparency and difficulty of the public to understand the mechanism or reconciling the local price fluctuations relative to the global, the petroleum price committee was replaced by the Automatic Pricing Mechanism in 2004.
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