Faced with the prospect of revenue loss on fuel jumping to Rs 700 billion (Rs 70,000 crore) next fiscal, Petroleum Ministry on Wednesday called for "harsh decisions" even as it hinted that cleaner Euro-IV fuel in 13 metro cities will cost more from April 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.
Petrol prices may be cut by as much as Rs 1-1.50 per litre next week on falling international oil rates and appreciating rupee but a one-time hike in diesel and possibly LPG rates is still on the cards.
Consumer goods companies are apprehending a dip in demand due to petrol price hike and an imminent increase in diesel prices that are adding pressure to customers, who are already reeling under the recent spike in interest rates.
The comparisons were available for 12 countries.
The government is likely to hike prices of petrol and diesel by Rs 4 and Rs 2 per litre, respectively, as global crude oil prices continued to surge.
Petroleum Minister Mani Shankar Aiyar on Monday remained non-committal on rolling back the hike in petrol, diesel and cooking gas prices saying the demands for revisiting the decision could only be considered after the Prime Minister returns from The
Perhaps for the first time, petrol in India costs more than the superior jet fuel (ATF) used in aeroplanes, as the government has levied a record excise duty on the fuel used in two-wheelers and cars.
'In the luxury car segment, the adoption of EVs is almost double compared to the mass market.'
India's fuel sales fell in the first half of April as a record rise in prices in a short 16-day period dented demand, preliminary industry data showed on Saturday. Petrol sales fell almost 10 per cent in the first half of April when compared with the same period in the preceding month, while diesel demand slid 15.6 per cent. Even cooking gas LPG, which had consistently shown growth even during the pandemic period, saw a 1.7 per cent month-on-month fall in consumption during April 1-15.
Petrol price was freed from government control in June 2010 but public sector companies continue to informally consult their parent Oil Ministry before taking a decision.
PM blames 'circumstances beyond control'; FM says urged states to consider 25% cut in petrol taxes
Virtually securing the consent of Left parties, the government is likely to decide next week on a price hike of Rs 4 per litre for petrol and Rs 3 a litre for diesel while sparing cooking gas and kerosene.
In a virtual rebellion against the United Progressive Alliance government, its largest ally Trinamool Congress on Friday threatened to pull out over the petrol price hike, as it sought an appointment with Prime Minister Manmohan Singh before taking "any vital decision".
Under-recovery or the difference between retail price and its imported cost on diesel was 8 paisa per litre in the first half of September.
Congress said ATF prices have been reduced by 31% while petrol only 16%.
The petroleum ministry has proposed a Rs 3.25 per litre hike in petrol and about Rs 4 per litre increase in diesel prices in line with the spurt in global crude oil prices that have touched $66 a barrel.
Cooking gas price was on Saturday hiked by Rs 11.42 per cylinder following government decision to raise commission paid to the dealers.
Finance Minister Pranab Mukherjee met Prime Minister Manmohan Singh late on Tuesday night and is understood to have briefed him about his talks with West Bengal Chief Minister Mamata Banerjee.
Centre and state governments are steadily increasing excise duties and value-added tax
Even as the Opposition went hammer and tongs to enforce the nationwide strike call against the petrol price hike on Thursday, the common man seemed to be backing off from joining the protest.
'Food grain availability for India's poorest is now approaching levels that haven't been seen since the British left. This has everything, sadly, to do with the rapacity of India's elites,' says Raj Patel, author, Stuffed and Starved.
"The UPA government showed its anti-people stance by increasing the prices of essential goods," said former AP chief minister Chandrababu Naidu.
Mamata Bannerjee, a key United Progressive Alliance constituent, has put the cat amongst the pigeons by demanding that the UPA set up a co-ordination committee to discuss important issues and decisions before they are made and implemented. She said the recent petrol price hike was undertaken without her consent.
The widening rift between Congress and Trinamool Congress came out in the open on Saturday with West Bengal Chief Minister Mamata Banerjee lashing out at her ally at the Centre and said it was free to quit the alliance.
Projecting a moderation in inflation despite the hike in petrol and diesel prices, the Economic Survey on Thursday cautioned against the pressures from rising foreign funds and global commodity price movement.
The international crude oil price of Indian Basket was $60.10 (Rs 3,765.27) per barrel on December 15, down from $60.58 (3,782.62) per bbl on December 12.
Prime Minister Narendra Modi on Friday announced a Rs 100 per cylinder cut in cooking gas LPG price to ease financial burden on households. Non-subsidised cooking gas price will be cut to Rs 803 per 14.2-kg cylinder in the national capital with effect from midnight of Friday/Saturday, official sources said. Prices vary from state to state depending on the incidence on local taxes.
After diesel, the government is considering raising cooking gas (LPG) and kerosene rates in small doses of Rs 5 per cylinder and Rs 0.50-1 a litre every month to wipe out Rs 80,000 crore subsidy on the two fuels.
The Bharatiya Janata Party on Thursday alleged that the hike in petrol prices was yet another act of "midnight deceit" by the UPA and insisted that the common man would not spare the dispensation led by the "economist" Prime Minister for its arrogance.
Petroleum Minister Ram Naik on Monday said the hike in petrol and diesel prices was "justified" given the hardening of global crude prices.
Petrol and diesel prices were on Wednesday hiked in seven states like West Bengal and Maharastra and that of domestic LPG in six states as state-owned oil firms recalibrated rates to reflect changes in local levies.
The government has cut the windfall profit tax on crude oil produced in the country while the levy on exports of diesel and ATF has been hiked, an official notification said. The tax, levied in the form of special additional excise duty or SAED, on domestically produced crude oil was reduced to Rs 6,700 per tonne from Rs 7,100 a tonne. SAED on the export of diesel was increased to Rs 6 per litre from Rs 5.50 a litre and on jet fuel or ATF to Rs 4 per litre from Rs 2, the notification said.
With crude oil touching a record $72 per barrel, Indian Oil Corporation is seeking a Rs 5.6 per litre increase in petrol and Rs 7.6 a litre hike in diesel prices to offset the Rs 80-crore (Rs 800-million) revenue loss per day.
Govt may further hike excise on petrol, diesel before Budget.
Rising crude oil prices are alarming, says PM. He considers all possible options to deal with it.
While consumers feel that petrol pinches directly, diesel hurts indirectly, as it is an input in almost all the goods and services we use.
Tata Motors has hiked the price of its premium small car 'Indica' by an average of 1.9 per cent with immediate effect.
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.
The three government oil marketing companies, Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, are losing Rs 320 crore a day as they sell at subsidised rates.
