The decision to hike petrol and diesel prices cannot be deferred for a very long time, Union Finance Minister P Chidambaram said on Tuesday.
Cooking gas or Liquified Petroleum Gas (LPG) price has been raised by Rs 50 per cylinder by distribution companies, Union Oil Minister Hardeep Singh Puri said on Monday.
Jet fuel or ATF price on Wednesday was cut by almost 6 per cent after four rounds of monthly increases since July, while commercial cooking gas (LPG) rates were raised by a steep Rs 101.5 per 19-kg cylinder in line with international benchmarks. However, the price of domestic LPG - used in household kitchens for cooking purposes - remained unchanged at Rs 903 per 14.2-kg cylinder. Aviation turbine fuel (ATF) price was cut by Rs 6,854.25, or 5.79 per cent, in the national capital to Rs 111,344.92 per kl from Rs 118,199.17, according to a price notification of state-owned fuel retailers.
The retail selling price of petrol at Delhi would come down by Rs 1.82 a litre.
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The hike, effective Monday midnight, excludes local sales tax or VAT and the actual increase will be higher, varying from city to city.
BJP deputy leader in Rajya Sabha S S Ahluwalia said the main aim of the opposition was to register its protest against the 'anti-people' policies of the government.
This is the second hike in diesel price this month.
Exuding confidence that the economy will grow by 8.5 per cent in 2011-12, Finance Minister Pranab Mukherjee on Wednesday said the recent hike in prices of petroleum products will not have much impact on the fiscal deficit.
According to police, CPI-M legislator K Bhimrao and other party supporters were arrested from Guindy railway station in Chennai.
The hike in prices of petroleum goods led to protests in several parts of the country and many state governments announced the withdrawal of value added tax on petroleum products to lessen the impact of the hike on the common man.
Petrol price has been cut by Rs 3.05 a litre.
Though the international crude prices were going up, the United Progressive Alliance government's approach was that the subsidy on petroleum products should continue as in the case of food and fertilisers.
The government on Tuesday ruled out any rollback of last month's increase in prices of petrol, diesel and LPG, and said a policy for pricing of major petroleum products was under review.
Petrol price on Thursday crossed the Rs 100-a-litre mark in Thane district of Maharashtra, while it was hovering a tad below that level in Mumbai, after fuel prices were raised again.
Faced with opposition from within the ruling coalition, the government has put-off till at least next week a decision on raising fuel prices that have been necessitated due to crude nearing $100 a barrel globally. The petroleum ministry has planned to take to the Cabinet this week a proposal to either marginally raise petrol and diesel prices or cut duties to offset the impact of raising international oil prices but the proposal is not being pursued this week.
Most of the participants in our poll believed that the hike in petroleum product prices is a positive trigger for companies.
The recurrent increases in fuel prices over the past 10 days are eating into the margins of transporters, who will be forced to pass on the hikes to their customers. This, in turn, is set to make the prices of daily consumables and other goods dearer, affect consumption, and slow economic growth, said transporters and analysts. Freight rates on grand trunk routes have shot up 3-4 per cent month-on-month in the past few days, according to the Indian Foundation of Transport Research & Training (IFTRT).
Additionally, road cess on petrol was raised by Re 1 per litre each on petrol and diesel to Rs 10.
State oil firms on Wednesday raised jet fuel (aviation turbine fuel) price by 5 per cent in line with the spike in international oil prices, which have touched a record $71 US a barrel.
In four hikes over four days, petrol price has gone up by Rs 2.14 per litre and diesel by Rs 2.23.
Railways have no plans as yet to increase freight charges despite the steep hike in diesel prices which have put an additional burden of over Rs 1200 crore (Rs 12 billion) on it.
Petrol price had been cut 10 times since August 2014.
Price has increased from Rs 41.90 to Rs 45.60.
If sources in the Congress party are to be believed, a hike in the price of petrol, diesel and cooking gas seems "inevitable".
International oil prices jumped to the highest level since 2014, topping $87 a barrel but domestic petrol and diesel prices remained unchanged for the 74th day in a row - a freeze that may be linked to ensuing assembly elections in states like Uttar Pradesh and Punjab. Brent - the key global oil benchmark - soared to $87.7 per barrel mostly due to rising geopolitical tensions and supply-side disturbances due to Yemen's Houthi group's attack on oil facilities in the United Arab Emirates. Also, global inventories are waning. The attack, some analysts believe, may lead to more hostile behaviour between the two power centres in the Middle East - Iran and Saudi Arabia.
Petroleum Minister Mani Shankar Aiyar on Tuesday indicated that the government would increase petrol, diesel and LPG prices, but also cut duties in a bid to contain the impact of surge in international oil prices.\n\n
The fiscal tilt towards capex benefits companies in investment-related sectors like capital goods, defence equipment, engineering & construction and metal & mining. The planned cut in revenue expenditure will weigh on companies in consumption sectors like FMCG, consumer durables and retail.
A decision on raising diesel prices by Rs 3-5 per litre, kerosene by Rs 2 and LPG by up to Rs 50 per cylinder will be taken after UPA Chairperson Sonia Gandhi returns from US, top government officials said.
Petroleum Minister Murli Deora on Monday ruled out any rollback in the increased prices of petroleum products, saying the hike has been reasonable and minimum. "The hike is reasonable and minimum ...," Deora told reporters here.
Sources say that this is a part of the government's efforts to mitigate the spurt in global oil prices.
The Kelkar Committee, which was appointed by Finance Ministry to suggest a roadmap for fiscal consolidation, has suggested immediate hike in fuel prices and complete deregulation of diesel prices by start of 2014-15 fiscal.
Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi discussed the Rs 225,040 crore (Rs 2250.40 billion) revenue loss oil PSUs face without raising price of petrol, diesel, LPG and kerosene and duty cuts this fiscal on three occasions but failed to give a clear verdict.
The Union Cabinet is believed to have approved a 'moderate' increase in the price of petrol and diesel in view of the surge in international crude prices.
OMCs are currently incurring daily under-recovery of Rs 230 crore.
Jet fuel (ATF) price was on Monday hiked by a steep 56.5 per cent and that of non-subsidised cooking gas LPG by Rs 11.5 per cylinder on the back of firming up of international oil rates, but petrol and diesel prices continued to remain on freeze for a record 78th day. Aviation turbine fuel (ATF) price was hiked by Rs 12,126.75 per kilolitre (kl), or 56.5 per cent, to Rs 33,575.37 per kl in the national capital, according to a price notification by State-owned oil marketing companies.
Jet fuel prices on Monday were hiked by a steep 6.5 per cent on the back of a rally in international oil prices. Aviation turbine fuel or ATF price was hiked by Rs 3,663 per kilolitre, or 6.5 per cent, to Rs 59,400.91 per kl in the national capital, according to a price notification of state-owned fuel retailers. This is the third increase in jet fuel prices since February. Rates were increased by 3.6 per cent on February 16, and by Rs 3,246.75 per kl on February 1. The increase in rates will add to the margin woes of airlines who continue to operate flights at less than capacity, amid pandemic-driven travel restrictions.
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