Indian's state-run oil producers and refiners gained in Mumbai trading after the government increased gasoline and diesel prices yesterday, helping to narrow losses.

    Oil & Natural Gas Corp., the nation's biggest explorer, jumped as much as 7.2 percent and was 4.2 percent higher at 1,095.3 rupees at 9:59 a.m. Indian Oil Corp., the nation's largest refiner, gained 3.4 percent to 560 rupees after rising as much as 5.2 percent. Bharat Petroleum Corp., the second biggest, rose 3 percent to 468.75 rupees and Hindustan Petroleum Corp. increased 2.4 percent to 318.90 rupees.

    India raised gasoline prices by four rupees (8 U.S. cents) a liter and diesel by two rupees a liter, Oil Minister Murli Deora told reporters in New Delhi yesterday. Gasoline in the capital will be 9.8 percent costlier after the first increase in prices in more than a year.

    Wholesale prices in the South Asian nation declined for the second straight week in the seven days to June 13, making it easier for India to increase fuel prices. Oil climbed to an eight-month high on June 30 and has risen 55 percent this year.

    Prime Minister Manmohan Singh, re-elected in national elections that ended in May, formed the government without support from communist lawmakers who oppose raising fuel prices.

    India's state-run refiners sell automobile and cooking fuels below costs to help curb inflation in the world¡¯

s second- fastest growing major economy. ONGC and GAIL give the refiners discounts on crude oil and cooking fuel as partial compensation for their revenue losses.

    Higher pump prices of fuels mean the refiners would lose less on fuel sales and decrease the discounts ONGC and GAIL must give the refiners.

    'Became Inevitable'

    "It has become inevitable to revisit prices"after crude increased 75 percent, the government said in a statement yesterday. India raised gasoline and diesel prices on June 6 last year and cut them in December and January.

    Refiners continue to lose two rupees a liter on gasoline and 1.62 rupees a liter on diesel after the increase in fuel prices, according to the statement.

    India's budget, to be announced on July 6, will contain details of the support for fuel marketing companies such as Indian Oil, Oil secretary R.S. Pandey said yesterday.

    Oil has more than doubled from $33.98 a barrel on Feb. 12, the lowest closing price in 2009. Crude oil for August delivery gained as much as 43 cents, or 0.6 percent, to $69.74 a barrel on the New York Mercantile Exchange, and traded at $69.05 at 12:46 p.m. in Singapore.