Petrol price hiked by Rs 4, diesel by Rs 2

Petrol and diesel will be costlier by Rs 4 per litre and Rs 2 per litre respectively from Thursday, the Govt said, in a move intended to help oil companies cope with increased global crude prices. Terming the fuel price hike as “the cruel first gift” from the new Govt, CPI(M) said the Govt has shown “contempt” for Parliament that convenes for the budget session on Thursday. HT reports. See Graphics

Petrol and diesel will be costlier by Rs 4 per litre and Rs 2 per litre respectively from Thursday, the government said, in a move intended to help oil companies cope with increased global crude prices.

The hike came after weeks of talks about how the rise in global crude prices – which more than doubled to over $70 in the past six months — was undermining the finances of the oil companies.

India imports more than 70 per cent of crude it needs to meet domestic fuel demand. Prices of cooking gas and kerosene, however, remain unchanged with an estimated subsidy of Rs 30,000 crore to be borne entirely by the government. Petrol and diesel prices were last cut by Rs 5 per litre and Rs 2 per litre in January when global crude prices had fallen to a low of $32 per barrel and the country was headed for elections.

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“It was definitely a political ploy to get votes, said Prateek Sachdeva , a 24-year-old chartered accountant in New Delhi. “Where have the government’s intentions to make things better for the common man disappeared suddenly?”

The move to reverse the January cuts appeared to be guided by a near-zero inflation rate, which gives enough headroom to the government to take such politically sensitive decisions.

Petroleum minister Murli Deora only consulted party leadership and Prime Minister Manmohan Singh to decide on the hike whereas fuel price revisions are usually referred to the Cabinet, which is scheduled to meet on Thursday.

Deora said the hike in fuel prices was necessary to control the losses of state-owned oil companies—Indian Oil Corporation, Hindustan Petroleum Corp and Bharat Petroleum Corp —which are losing Rs 6 per litre on petrol and Rs 3.62 per litre on diesel.