New Delhi, May 16 -- The Indian Rupee has reached a critical level where any further depreciation could wipe out the gains from the recent Rs 3 per litre increase in petrol and diesel prices, according to an SBI Research Ecowrap report.

The report warned that "even an additional depreciation of Rs 2 in the Rupee raises the effective crude oil price, pushing the landed import cost, which fully offsets the gains from the current fuel price hike."

The SBI Research report said the recent fuel price hike was aimed at reducing losses faced by Oil Marketing Companies (OMCs) due to elevated crude oil prices and unchanged retail fuel prices.

"OMCs' under recoveries on sales of petrol and diesel are soaring because of unchanged retail prices," t...