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.
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.
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.
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.
Here is a list of items set to become cheaper and costlier.
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.
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.
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.
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.
Former Petroleum Minister and senior Bharatiya Janata Party leader Ram Naik on Wednesday flayed the Congress-led government for raising the LPG prices, saying the burden on the common man could have been avoided by cutting duties.
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.
Planning Commission Deputy Chairman Montek Singh Ahluwalia on Saturday strongly supported the view that petroleum prices in the country should "align with the global price."
The Bharatiya Janata Party on Tuesday announced country wide protest programme for two days beginning Wednesday against the hike in the prices of petroleum products.
The proposed move would lead to dismantling of the administered price mechanism.
The government on Monday said it would not free diesel prices from its control in hurry as the move would lead to sharp rise in price of fuel most used in the transport sector.
Left parties on Monday opposed any increase in petrol and diesel prices in step with the hike in global oil prices and higher taxes, and asked the government to restructure duties to protect the consumers.
Concerned over crude oil prices touching a record $64 a barrel in the international market, Petroleum Minister Mani Shankar Aiyar on Tuesday said the Cabinet will decide on raising domestic fuel prices in line with the spurt.
A higher government borrowing will 'crowd-out' the private borrowing and push interest rates higher.
The government on Thursday decided not to increase petrol and diesel prices, and issue oil bonds worth Rs 23,457 crore (Rs 234.57 billion) to partly compensate public sector oil companies for the losses incurred on fuel sales."We have kept our promise of not raising prices of sensitive petroleum products," Petroleum Minister Murli Deora told PTI after a meeting of the Cabinet.
Prices of petrol and diesel will not be reduced immediately as oil companies continue to make losses even after the recent fall in international oil prices, Petroleum Minister Murli Deora said on Wednesday.
No change in retail prices as oil marketing firms to absorb increase
The rise in petro-product prices have been necessitated by rising global costs of petroleum and the fact that the price of petrol and diesel has not been increased in India since January 2004.
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.
Home-grown automobile major Mahindra & Mahindra, whose sales are predominantly driven by diesel-powered utility vehicles, has said an increase of Rs 5 a litre in the price of the fuel or a differential of up to 20 per cent with petrol price will not impact vehicle sales.
The government is exploring various options, including a marginal hike in prices of petrol and diesel, and a possible duty cut to ease burden on state-run oil firms that are increasingly losing revenue due to global crude prices surging close to $100 a barrel. "We will do all that is possible to protect the interests of our PSUs," Petroleum Minister Murli Deora said after a brief meeting with Prime Minister Manmohan Singh on the issue on Friday.
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.
Parliament failed to transact any business on Monday as the Opposition members created uproar over hike in fuel prices and demanded immediate rollback.
Amid news of a fuel shortage in some parts of the country and wider unrest over fuel issues in the neighbourhood, an analysis of the data from international tracker globalpetrolprices.com shows that the per litre price of petrol is higher in India than in seven out of its nine neighbours.
Petrol, diesel prices hiked by Re 1/ litre
The average price of Indian basket of crude oil during 2007-08 (upto August) has increased to $68.34 per barrel as compared to 62.46 dollars a barrel during 2006-07.
We no longer have the ambition to rival China save through words. We are happy to be fighting ourselves and digging up disputes from centuries ago as a substitute for real development, argues Aakar Patel.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances