Close on the heels of a 70 paise per litre hike in petrol prices, the Oil Ministry is pushing for an increase in diesel and domestic cooking gas LPG prices, even though it is unsure of political support for the unpopular move with the ruling UPA alliance.
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.
In the sixth such hike in three months, petrol price has been increased by a steep Rs 2.35 per litre and diesel by 50 paise per litre on falling rupee and firming international oil prices.
Government may raise petrol price by Rs 2 a litre and diesel by Re 1 a litre this week, but a duty rejig to minimise impact of high international crude oil prices looks unlikely. The decision on this will be taken by the Cabinet headed by Prime Minister Manmohan Singh.
The fall in international oil prices had resulted in six consecutive reduction in petrol prices since August and two in diesel in the last one month and there was possibility of another round of cuts this weekend.
The Union government on Thursday ruled out any increase in the prices of petrol and diesel despite the surge in global crude prices.
The recent petrol and diesel price hike by the government did not go down well with the common people who expressed their\ndispleasure over this pre-Budget move. The prices were raised by as much as 10 per cent on Wednesday.
What could be more uncertain than Virat Kohli's agonising wait for a century for over two years? Perhaps it's what you will pay tomorrow morning to fill your vehicle's tank. Pump prices have joined cricket scores as the country's favourite discussion topic. Steep increases invite widespread protests, while moderate additions make the government anti-reformist. The ongoing fuel price conundrum is no different.
State-run Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum currently sell petrol, a commodity which the government freed from its control in June last year, at a discount of about Rs 4.50 a litre to its imported cost.
Petrol currently costs Rs 72.51 per litre in Delhi.
The government's decision to pass on the rise in oil prices to consumers not only inflates their petrol and diesel bills, it also fuels concerns over a possible economic recession, analysts said.
The increases, which follow similar hikes in mid-November, seek to take advantage of a slump in world oil prices to shore up government revenues without stoking inflation.
A hike in diesel and domestic LPG prices has been deferred for now, but an increase in petrol prices later this week looks imminent.
With a high-powered ministerial panel on fuel pricing being scrapped, a cabinet committee may consider raising the prices of diesel, LPG and kerosene, Oil Minister S Jaipal Reddy indicated on Wednesday but refused to say when the issue would be taken up.
Centre and state governments are steadily increasing excise duties and value-added tax
Celerio's 793-cc diesel engine is the smallest in the market.
Petrol, diesel, LPG and kerosene prices are unlikely to be revised immediately as the Congress-led Government, which is yet to assume office
Petrol price was on Monday hiked by Rs 2.19 a litre and diesel by 98 paise per litre.
Left leaders Sitaram Yechury and A B Bardhan on Thursday shared dais with Bharatiya Janata Party's Nitin Gadkari and Murli Manohar Joshi at a demonstration against FDI in retail and hike in diesel prices.
The increase in rates announced by oil firms is excluding state levies and the actual hike will be higher.
Underrecovery from sensitive petroleum products seen at Rs 1,55,000 cr in current fiscal.
On December 5, the government had announced a Rs 5 per litre and Rs 2 a litre reduction in petrol and diesel prices, respectively, as global crude prices hovered around four year lows.
Making a case for increasing prices of petroleum products and deregulating diesel prices, the Reserve Bank on Monday said these steps are necessary to contain fiscal slippages and arrest decline in growth.
Petrol price will be cheaper by 49 paise/litre and diesel by Rs 1.21.
There is no payment problem for Russian crude, Petroleum and Natural Gas Minister Hardeep Singh Puri said on Wednesday. He said there is no proposal to cut retail fuel prices at the moment. Addressing a press conference, the minister said India enjoys a buyers' position and foreign suppliers are approaching Indian companies with offers to sell oil.
This is the fourth increase in auto fuel prices since May 1
The goverment on Wednesday ruled out any increase in petrol and diesel prices despite international crude oil prices touching an all-time high.
In June, the government had decontrolled petrol, causing a hike of Rs 3.5 per litre, and increased diesel prices by Rs 2 a litre, LPG by Rs 35 a cylinder and kerosene by 3 a litre -- amid protests by opposition parties.
Government earlier this month cut petrol price by Rs 5 a litre and diesel by Rs 2 per litre as crude oil prices dipped from an all-time high of $147 a barrel in July to under $45 a barrel. Even after the price cut, public sector oil firms were making a profit of Rs 9.98 on sale of every litre of petrol and Rs 1.03 per litre on diesel.
This is the third reduction in rates this month
The Cabinet Committee on Economic Affairs on Wednesday deferred a decision on the package on pricing and distribution of sensitive petroleum products.
Cooking gas price was on Saturday hiked by Rs 11.42 per cylinder following government decision to raise commission paid to the dealers.
This is the second increase in rates of petrol this month while in case of diesel it wipes away a part of the hike effected earlier this month
Petroleum ministry has sought an increase of Rs 2.50 per litre in petrol and Rs 1.30 per litre in diesel prices in line with hike in tax rates announced in Budget and asked oil firms to bear the impact of surge in global oil prices.
While petrol prices are de-controlled, diesel prices are partially deregulated.
'The actual price of petrol is Rs 35 and it jumps to Rs 88 because of government taxes.'
The movement of prices in the international oil market and rupee-USD exchange rate shall continue to be monitored closely and developing trends of the market will be reflected in future price changes
Six non-BJP ruled states -- West Bengal, Tamil Nadu, Andhra Pradesh, Telengana, Kerala and Jharkhand -- have not reduced the VAT on petroleum products, leading to higher prices of petrol and diesel there, Petroleum Minister Hardeep Singh Puri said on Thursday. Puri said in Lok Sabha that the central government has reduced excise duty on petroleum products and some other states, following cues, reduced their Value Added Tax (VAT). Six states -- West Bengal, Tamil Nadu, Andhra Pradesh, Telengana, Kerala and Jharkhand -- have not reduced the VAT, he said amidst vocal protests by the opposition members.
The ongoing Hamas-Israel conflict has disrupted India's efforts to gain from a recent fall in crude oil prices. Since Hamas' invasion of southern Israel on October 7, petroleum has become costlier by around $5 per barrel, threatening to stoke prices and impact growth. Brent crude was trading at $89.8 per barrel on October 9 (9.15 pm IST), up over 4 per cent, thwarting India's anticipation of a period of declining oil prices - after the leading global petroleum benchmark declined by around 11 per cent last week.
