New Delhi: After last
month's steep petrol price hike, the common man now will have to
suffer an increase in the prices of diesel, kerosene and cooking
gas, with the government hiking them by Rs.3 per litre, Rs.2 per
litre and Rs.50 per cylinder respectively, with effect from Friday
The price increase was predictably greeted with anger from the
common man and opposition parties, with the BJP and the Left
planning a stir against the government.
At the same time, the government also decided to cut down on
customs and excise duties on petroleum products.
"Minimal increase in product prices to reduce under-recoveries of
the oil marketing companies (has been decided). The price of
diesel will be increased by Rs.3 per litre, PDS kerosene by Rs.2
per litre and domestic LPG by only Rs.50 per cylinder, excluding
state levies such as VAT," Petroleum Minister S. Jaipal Reddy said
here Friday evening.
He made the announcement after the meeting of the Empowered Group
of Ministers (eGoM), headed by Finance Minister Pranab Mukherjee
The minister said the decision was necessary, despite the
continuing political controversies that have besieged the
"We are vibrant democracy involving 1.2 billion people. We will
always have some crisis or other. As it is, these minimal
decisions have been inordinately delayed," he said.
He was referring to the repeated postponement of any decision by
eGoM, reportedly due to political sensitivities over state
Reddy also announced that there would be slashing of excise duties
and customs duties on diesel, which cost the exchequer Rs.49,000
crore. He urged state governments to also decrease their levies on
He added that while the Friday price hike will decrease the losses
suffered by oil marketing companies by Rs.21,000 crore, they would
still continue to incur estimated under-recoveries of Rs.1.20 lakh
crore this year.
Before the hike, oil marketing companies suffered losses of
Rs.13.72 per litre of diesel, Rs.26.16 per litre of kerosene and
Rs.381.14 per LPG cylinder.
On a daily basis, Indian Oil, Hindustan Petroleum and Bharat
Petroleum, incur a total loss of Rs.456 crore on the sale of the
three petro products.
On May 14, oil marketing companies had increased the price of
petrol, which have been decontrolled, by Rs.5 per litre - its
steepest hike ever.
The hike comes just a day after the government announced that
India's food inflation had soared nearly 10-week high of 9.13
percent for the week ended June 11.
Following the recent dip in international prices, the Indian crude
basket Friday was priced at $107.07 per barrel Thursday. The
average of the previous fortnight from April 16-30 stood at
$112.74 per barrel.
The last time the monthly average was above $100 level was in
August 2008, when the crude basket price was calculated at $113.05
Kiran Devi, a house maid, was upset over the hike of Rs.50 in LPG.
"I just saw the news on TV. The government has no mercy left for
the poor. I have other expenses to look after and with this added
burden I will be on the verge of crumbling," said a miffed Devi.
Similarly, 25-year-old Vivek Malik, working in a publication, was
equally angry. "Yesterday (Thursday), Pranab Mukherjee said that
the government will do something about the inflation. Today they
have done 'something' about the inflation which has battered the
common man in this country," rued Malik.
A major ally of the government, West Bengal Chief Minister Mamata
Banerjee, said she does not support frequent fuel price hikes as
they put immense pressure on the common people.
"We don't support this frequent price rise of fuels. This creates
lot of problems for the people. We have already conveyed our
opinion at the appropriate place," the Trinamool Congress chief
told mediapersons in Kolkata.
The opposition parties were naturally up in arms. Bharatiya Janta
Party (BJP) Leader of Opposition Sushma Swaraj tweeted that the
decision showed insensitivity on the government's part. "This is
the 10th hike in the prices of petroleum products. Congress
government came to power on the slogan 'Congress ka haath aam
adami ke saath.'. This is what the common man has got. This
government is totally insensitive to the sufferings of the common
man.. The victims are housewives, farmers and poorest of the
poor," she tweeted.
The BJP plans protest at all district headquarters against the
fuel price hike Saturday.
Communist Party of India (CPI) leader A.B. Bardhan said that the
decision to raise price will affect the common man in the country.
"This is one of the greatest attacks on the common man. Due to the
hike in diesel prices there will be increase in the transportation
cost. Besides this, increase in cooking gas prices will affect the
middle class households in India," he said.