Steepest ever hike hits petrol

  • Anupama Airy, Hindustan Times, New Delhi
  • |
  • Updated: May 24, 2012 12:09 IST
  • Manmohan Singh

    A protester burns a portrait of Prime Minister Manmohan Singh during a protest in Odisha against the steep rise in petrol prices. State oil companies ...

  • An employee

    An employee counts notes at a fuel pump in Ahmedabad after the government decided to hike prices of petrol by 11.5%. AP/Ajit Solanki

  • BJP

    BJP protesters burn the effigy of UPA government against the petrol price hike, in Hyderabad. State-run oil firms announced a sharp hike in petrol prices ...

  • market data

    West Bengal chief minister Mamata Banerjee shows market data during a press conference regarding the price hike of petrol, in Kolkata. Also seen in the ...

  • Rs 7.50

    Heavy rush at a petrol pump in New Delhi after the announcement of a hike in petrol price by Rs. 7.50.

  • queue

    Vehicles queue up near a petrol pump in New Delhi. HT/Sonu Mehta

  • Vehicles

    Vehicles queue up near a pump to fill petrol in tanks before the steep hike in price gets effective in New Delhi. HT/Sonu Mehta

  • subsidy

    Oil companies on Tuesday announced a cut in petrol prices by Rs. 2.42 per litre and diesel by Rs. 2.25 a litre.  (AFP File Photo)

  • BJP

    BJP protesters shout slogans as they burn the effigy of the UPA government against the petrol price hike, in Hyderabad. AFP/Noah Seelam

  • vehicles

    People line up to fill their vehicles at an oil pump in Lucknow after the announcement of hike in petrol prices. PTI/Nand Kumar

In the first petrol price hike in six months, state-owned oil marketing companies shocked the consumer on Wednesday by making petrol sharply costlier. Delhiites will now have to pay Rs 7.54 a litre more — the steepest ever in 10 years.

Even though the government decontrolled petrol prices in June 2010, the last price hike came on November 4. Since then, the government did not allow any increase due to political compulsions despite oil prices shooting up following the huge fall in the value of the rupee against the dollar.

The oil companies, which had in the fiscal ending March 31, 2012 lost Rs 4,860 crore on petrol sales, are now losing Rs 6.28 a litre. After including the 20% VAT, the increase in petrol price in Delhi came to Rs 7.54 a litre.

While no revision has been announced immediately in diesel and cooking gas prices, senior government officials said it might be announced shortly after the meeting of the empowered group of ministers — chaired by finance minister Pranab Mukherjee — on Friday or early next week.

Prices of diesel, kerosene and cooking gas were last raised in June and the EGoM, with representatives of key UPA allies such as the TMC and DMK, hasn’t met for almost a year now.

Chairman of the prime minister’s economic advisory council C Rangarajan had suggested in a report to the government that a Rs 4-a-litre hike in diesel prices was necessary besides charging market prices for cooking gas beyond four cylinders at subsidised prices a year.

Petroleum and natural gas minister Jaipal Reddy, who is now in Turkmenistan to sign a gas pipeline deal, hinted on Tuesday at the hike, citing the free fall in rupee prices against the dollar as the reason.

He said, “If the rupee depreciates by one against the dollar, the OMCs (oil marketing companies) lose Rs 8,000 crore annually. The rupee on Monday dipped to Rs 55 to the dollar against R46 last year. This translated into a loss of Rs 72,000 crore on account of rupee depreciation this year.”

The Capital’s filling stations saw long queues after the announcement of the hike, since the decision was to take effect from midnight Wednesday.

A Delhi Police officer said, “Some petrol pumps stop selling petrol claiming they are out of stock. They start selling after midnight when they can charge the increased amount. This makes motorists angry.”

The hike saw howls of protest from the government’s allies and opponents as it comes at a time when UPA-2 is celebrating its three years in office.

The UPA’s outside supporter Samajwadi Party dubbed it a “gift” to the common man from the government on its completion of three years in office.

Mamata Banerjee, chief of the Trinamool Congress — the second biggest constituent of the UPA — reacted sharply, saying her party would not accept the hike. But she made it clear that she would not topple the government, as it would create economic and political instability.

Petrol in Mumbai will cost Rs 78.57 a litre against Rs 70.66. In Kolkata, a Rs 7.85-per-litre increase will take it to Rs 77.88 per litre and Chennai will see rates go up by Rs 7.98 to Rs 77.53 a litre.

VOTE: Is the government justified in increasing petrol price? | Rs 7.50 up 

also read

Congress hints at partial rollback in petrol price hike

blog comments powered by Disqus