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Prime Minister Manmohan Singh on Saturday hinted at replacing the current practice of fortnightly revision of petrol and diesel prices with a more stable pricing policy once the volatile international crude prices stabilise.
Buckling under pressure, the government on Wednesday cut the excise duty on petrol and diesel by Rs 5 and Rs 10 respectively to bring down retail rates from record highs. The announcement comes on the eve of Diwali which will help bring down the skyrocketing prices of fuel and provide some relief to the common man battling inflation.
Petrol and diesel prices are unlikely to be reduced in line with falling international prices as the government is working on a stable pricing regime.
The Cabinet Committee for Economic Affairs is expected to meet on Wednesday evening to take this decision, given the cheap crude prices in the global market. The government had last cut petrol prices on December by Rs 5, and diesel rates by Rs 2 a litre.
In first clear indications of a further reduction in petrol and diesel prices, Petroleum Minister Murli Deora on Monday said the government was considering passing on the benefit of the fall in international crude oil prices to consumers.
"There is no immediate plan to decontrol diesel or LPG as they have cascading effect (on general prices)," Minister of State for Petroleum and Natural Gas R P N Singh told reporters in New Delhi.
Here is a list of items set to become cheaper and costlier.
Thirteen big cities, including Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Lucknow, Kanpur, Agra, Surat, Ahmedabad, Pune and Sholapur will move from Euro-III grade fuel to Euro-IV from Thursday.
Faced with huge under-recoveries, Indian Oil Corporation on Saturday sought an immediate upward revision of petrol and diesel prices to the the extent of Rs 10.50 paise per litre.
Congress said ATF prices have been reduced by 31% while petrol only 16%.
A formal announcement is likely in Parliament on Wednesday. This will reverse half of the price hike in June, when petrol price was increased by Rs 4 and diesel by Rs 2.
Facing difficulties in daily operations due to constant increase of fuel prices by oil marketing companies, the Consortium of Indian Petroleum Dealers' Association have threatened to go on a one-day strike.
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.
Adding petrol and diesel to GST was a challenging task due to their significant role as revenue generators for both the central and state governments.
According to police, CPI-M legislator K Bhimrao and other party supporters were arrested from Guindy railway station in Chennai.
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.
The Ministry Of Petroleum and Natural Gas has ruled out a hike in the prices of petrol and diesel in the near future even as the price of the Indian basket of crude oil continues to remain above $65 a barrel.
India should learn to live with high energy prices for rapid economic growth, said Planning Commission Deputy Chairman Montek Singh Ahluwalia after two of the state-owned oil companies hiked petrol rates this week.
The information technology and telecom ministries spent a whopping Rs 53.14 lakh on petrol in two years, according to a RTI report.
Centre and state governments are steadily increasing excise duties and value-added tax
The government is unlikely to take up the issue of reducing petrol, diesel and domestic LPG prices on Thursday as consultations on petroleum ministry's simultaneous proposal for freeing auto fuel pricing were not complete.
State-owned oil firms on Tuesday decreased retail selling price of petrol and diesel by up to Rs 1.08 and Rs 1.18 per litre, respectively, in step with the global softening of crude prices.
Hardening prices of manufactured items during the month may refrain the Reserve Bank of India from cutting rates in its policy review on February 8.
With vast disparity in fuel prices, the demand for diesel cars had reached upto 85 per cent and petrol cars had come down to 15 per cent, which otherwise usually remained at 50:50 per cent levels in India.
Diesel price hike is a tough decision and we need lot of tough decisions to get to 8 per cent growth rate," Planning Commission Deputy Chairman Montek Singh told reporters.
After slamming the Centre for the steep hike in petrol price, West Bengal Chief Minister Mamata Banerjee on Saturday hit the streets in Kolkata, leading a massive protest march to put pressure on the United Progressive Alliance government for a roll-back. Banerjee, who was accompanied by Railway Minister Mukul Roy, party functionaries and thousands of Trinamool Congress workers, marched from Jadavpur to Hazra crossing, a distance of five km in south Kolkata.
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.
The government on Friday slapped an export tax on petrol, diesel and jet fuel (ATF) while also joining nations like the UK in imposing a windfall tax on crude oil produced locally. A Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel is effective from July 1, finance ministry notifications showed. Additionally, a Rs 23,250 per tonne tax was levied on crude oil produced domestically.
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.
BJP-ruled Maharashtra levies 46.52 per cent VAT (47.64 per cent in Mumbai) on petrol, the highest in the country.
Oil marketing cos rightly passed on the burden to buyers.
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.
Days after saying that there is no need for subsidies to achieve greater penetration of electric vehicles (EVs), Union Minister of Road Transport and Highways Nitin Gadkari on Monday clarified that the view is his own, but any official call on EV subsidies is not one that he can take.
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.
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.
For the first time in the history of India, state-run oil firms on Saturday passed on the benefit of appreciating rupee value to consumers by way of a 10 paise per litre cut in petrol and diesel prices.
The government is unlikely to hike prices of petrol and diesel at the next revision due on August 31 despite the surge in crude oil prices.
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