Finance Minister Pranab Mukherjee on Friday ruled out rollback of petrol and diesel price hike saying the nation's fiscal condition did not permit him to do so.
State-owned oil companies have announced a hike in petrol prices between 37 and 40 paise in the major cities, while diesel will be costlier by 37 to 44 paise with effect from midnight on Friday.
With fuel being the main input cost for the transport sector, rise in cost of operations is a given. The sector is unsure on the extent of being able to pass this on through rentals or to absorb it with higher volumes.
The cabinet committee on economic affairs will meet this evening to decide on the prices of petrol, diesel, LPG and kerosene, petroleum minister Mani Shankar Aiyar said.
Petrol price was on Tuesday hiked by Rs 2.58 a litre and diesel by Rs 2.26 per litre, the second increase in rates this month.
Petrol price was hiked by 30 paise per litre and diesel by 35 paise a litre, according to a price notification of state-owned fuel retailers. The seventh straight day of price hike pushed fuel rates to a new record high. The price of petrol in Delhi rose to its highest-ever level of Rs 104.44 a litre and Rs 110.41 per litre in Mumbai, the notification showed. In Mumbai, diesel now comes for Rs 101.03 a litre; while in Delhi, it costs Rs 93.17.
The room for political manoeuvre to raise petroleum prices is the highest at this point in time, says Business Standard.
The domestic car market, which sees sales of almost one diesel car for every petrol car sold, will see demand for diesel-powered cars to hit the roof.
A proposal in the Union Budget 2022-23 to raise excise duty on dirtier, unblended retail petrol and diesel has met with some resistance from the petroleum ministry. However, finance ministry officials say no such communication arguing against the levy of extra duty on diesel has been received from the oil ministry. Until there are discussions between the two departments, the proposal will not be tweaked in the Finance Bill. The Rs 2 per litre additional excise duty proposed on unblended fuels in the Finance Bill will result in a uniform hike of diesel prices across the country from October 1.
The government on Friday decontrolled petroleum prices to bring fuel costs in line with global oil rates after an Empowered Group of Ministers, headed by Finance Minister Pranab Mukherjee, met for the second time in less than three weeks to decide on raising fuel prices. Railway Minister Mamata Banerjee was absent again.
The 17th daily increase in rates, since oil companies on June 7 restarted revising prices in line with costs after ending an 82-day hiatus in rate revision, has taken diesel prices to fresh highs.
Sources said both Mukherjee and Deora were in favour of Rs 2-3 a litre hike in petrol and diesel prices and Rs 25 per cylinder increase in LPG rates.
Petrol and diesel prices were hiked for the fourth consecutive day on Saturday by 35 paise per litre, pushing the total increase in rates on petrol to Rs 36 per litre and on diesel to Rs 26.58 since early May 2020 when taxes on the two fuels were raised to record levels. Petrol in Delhi now costs Rs 107.24 a litre and diesel comes for Rs 95.97, according to a price notification of state-owned fuel retailers. The latest increase that follows the unrelenting hike in international oil prices has pushed pump rates across the country to their highest-ever levels.
"In the wake of the recent diesel price hike, the Indian Railways will not pass its additional financial burden on its users -- passengers and freight customers," Railway Minister Lalu Prasad Yadav said. While truck rental is expected to be increased by about 5 per cent, private taxis and commercial passenger vehicles are also expected to follow suit.
In New Delhi, state Congress president Anil Kumar and party workers were detained by police at a petrol pump near Parmanand hospital.
Petrol price on Thursday was cut by Rs 6.07 per litre and diesel price by Rs 11.75 in Delhi as oil companies passed on a record reduction in excise duty rates to consumers. Buckling under pressure, the government had on Wednesday cut excise duty on petrol by Rs 5 per litre and that on diesel by Rs 10 a litre to give reprieve to consumers battered by record high retail fuel prices. Since states charge local sales tax or VAT not just on the base price but also on the excise duty levied by the centre, the total incidence of price reduction is higher.
Petrol and diesel prices will not be hiked immediately as the Cabinet on Friday did not discuss the issue, Defence Minister Pranab Mukherjee said.
The government's decision to raise fuel prices in June has scuttled the oil companies' plans to reduce their losses from retail fuel sales as consumers are buying less of premium fuels, which is more expensive than normal fuels.
A litre of diesel will cost Rs 48.01 compared to Rs 49.31 at present
Reliance Industries on Friday dubbed as a "canard" allegations that the near-doubling of natural gas prices will lead to a similar hike in domestic cooking gas (LPG) and inflation in food item rates.
India, the world's third largest oil importing and consuming nation, is likely to save as much as Rs 1.8 lakh crore on import of crude oil and LNG if the trend of softening international energy rates continues, Icra said Wednesday. India, which meets over 85 per cent of its crude oil needs through imports, spent $242.4 billion on buying crude from overseas in the fiscal year ended March 31, 2025.
Cement manufacturers have hiked prices after a challenging Q1FY25, and Q2FY25 (so far) when general elections and seasonal factors cut down on construction activity. The August prices are currently around 3-6 per cent above July 2024 but may not be sustainable in the face of weak demand. H2FY25 may see realisation growth which, if it happens, would drive average operating profit/tonne improvements in H2FY25 over a muted H1FY25.
The government is mulling a Rs 2-3 per litre hike in petrol and diesel prices, as oil firms are losing around Rs 10 per litre on the two fuels due to hardening global prices.
The Railway Budget will be a tough balancing act for the minister, who needs to mobilise resources urgently to offset the burden of the recent diesel price hike.
Prime Minister Manmohan Singh on Tuesday said that diesel prices too will be freed from government control as part of 'much-needed reforms', but LPG and kerosene will continue to be subsidised.
The opposition party vowed to hit the streets against the "Modi-made inflation" and run a people's movement over price rise.
PM's economic advisors have suggested a hike in petrol and diesel prices to tackle the global crude prices.
With the 72-hour deadline to the Centre to rollback diesel price hike, LPG subsidy cap and FDI in multi-brand retail expiring on Monday, the Trinamool Congress mounted fresh pressure with a Union minister belonging to it listing three options, including withdrawal of support to the United Progressive Alliance.
Petrol price may be reduced by about Re 1 per litre while diesel price may be hiked by 40-50 paisa a litre from March 15/16.
The government, however, stood firm, ruling out any immediate rollback but promising to reduce the prices as and when the international crude prices drop. It went on to assert that the increase in the fuel rates was minimal, keeping in mind the 'interests of the aam aadmi.' Petroleum Minister Murli Deora said, "In view of the continuous rise in global crude prices, a marginal increase had become unavoidable."
Here's how political leaders reacted to the government's decision to hike the price of diesel by Rs 5 and limit the number of subsidised gas cylinders to six per household per year.
Car major Hyundai has announced a price hike prices across models, including recently launched Verna, between 1 to 1.5 per cent.
India Against Corruption on Friday alleged that the opposition to the hike in diesel price by political parties was a "drama" and demanded immediate rollback of the increase in fuel price.
The loss, which is made good through government subsidy, has declined since March as the rupee strengthened against the dollar and global oil prices softened.
Cooking gas price was on Saturday hiked by Rs 11.42 per cylinder following government decision to raise commission paid to the dealers.
The Congress is yet to form a government at the Centre but it faces the prospect of being credited with a highly unpopular decision of a one-rupee per litre hike in petrol and diesel prices.
Acknowledging that the Union government had its own pressures in increasing petrol and diesel prices, Tamil Nadu Chief Minister M Karunanidhi, whose party DMK is a key UPA ally, said on Wednesday that it would persuade the Centre to roll back the prices.
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