Various oil companies had invested Rs40,000 crore in putting up facilities to produce cleaner fuel and the prices have been increased to make up for the cost

Thirteen big cities, including the four metros, will switch to cleaner 'Euro-IV' grade motor fuel from tomorrow, on account of which consumers would have to shell out up to Rs 0.50 a litre more.

Petrol prices in Delhi will go up by Rs0.50 per litre to Rs 47.93 a litre and diesel by Rs0.26 to Rs38.10 a litre on account of supply of the cleaner Euro-IV fuel, a government official said, but did not wish to be identified.

Thirteen cities, including Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Lucknow, Kanpur, Agra, Surat, Ahmedabad, Pune and Sholapur will move from Euro-III grade fuel to Euro-IV from tomorrow. Rates will vary from city to city depending upon local taxes.

The rest of the country will switch from Euro-II specification fuel to Euro-III in phases, beginning with Goa from tomorrow. Sale of Euro-III grade will be phased over the next five-six months.

Euro-III petrol will cost Rs 0.26 a litre more and same grade diesel Rs 0.21 per litre, the official said, adding that the rates will differ from city to city.

Prime minister Manmohan Singh, who was approached by the the petroleum ministry for clearance, had yesterday approved the price hike.

Oil companies had invested Rs40,000 crore in putting up facilities to produce cleaner fuel and the prices have been increased to make up for the cost.

This will be the third hike in diesel rates for Delhi in less than a month and the second for petrol. Petrol prices were raised by Rs2.71 and diesel by Rs2.55 a litre from 27th February as finance minister Pranab Mukherjee hiked excise and customs duties. Diesel rates went up by Rs2.37 on 23rd March  when the Delhi government raised VAT on the fuel.

Euro-IV grade auto fuel confirms to European emission standards that define acceptable limits for vehicle exhaust emissions for member states of the European Union. It is less polluting since it restricts the presence of sulphur in the fuel.

The official said that oil firms could not have absorbed the cost of producing cleaner fuel as they lose about Rs250 crore per day on selling auto and cooking fuel below cost. Retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum currently lose Rs6 per litre on petrol, Rs4.06 a litre on diesel,
Rs16.91 per litre on kerosene and Rs267.36 per 14.2-kg LPG cylinder.