New Delhi, May 14 (IANS) In its steepest hike so far, the price of petrol will be raised Rs.5 per litre in an over 8 percent increase from Saturday midnight. The increase comes only a day after the assembly poll results in five states, and was greeted by anger and derision from ordinary citizens and opposition parties.
According to officials, the three state-run companies will increase the price in a move to plug the losses suffered due to sale of subsidised domestic fuel.
In Delhi, petrol is currently priced at Rs.58.37 per litre, while it is Rs.63.08 per litre in Mumbai till Saturday. From midnight, it will be raised to Rs.63.37 and Rs.68.33, respectively.
In June last year, the government had allowed oil companies to set the price of petrol as per the market situation, following which they had raised the price of petrol by Rs.3 per litre.
Then, another substantial price rise took place in December 2010, when companies had hiked the price by Rs.3 per litre.
The last price hike was in January, when oil companies had raised the price by four to two percent. Thus, in the last nine months, the price of petrol has increased from Rs.47.93 per litre to Rs.63.37 - through nine revisions.
Despite the hike, oil company officials said they will still be losing about Rs.5 per litre of petrol, due to rising international crude prices, with India meeting eighty percent of its fuel consumption through imports. Another hike may be done next week, said officials.
There has been steady increase in the international prices, with the Indian crude basket priced at $113.09 per barrel Friday. The average of the previous fortnight from April 16-30 stood at $119.4 per barrel.
The last time the monthly average was above $100 level was in August 2008, when the crude basket price was calculated at $113.05 per barrel.
The biggest loss of the companies, however, is due to the sale of diesel, cooking gas and kerosene, whose price continues to be controlled by the government. Every day, oil companies lose Rs.495 crore due to the sale of these three products alone.
The empowered Group of Ministers (eGoM) on fuel prices is scheduled to meet next week, to consider a proposal to raise prices.
According to sources, there are proposals to increase the price of diesel by about Rs.4 per litre. Similarly, cooking gas cylinder could become costlier by about Rs.20.
The Bharatiya Janata Party (BJP) and the Left parties condemned the hike in petrol prices Saturday, terming it as an 'attack' and a 'cruel hoax' on the common man.
The BJP said it would fight against the measure 'inside and outside parliament' while the Left called it hypocrisy, coming a day after the election results to five states.
'The petrol price hike exposed the failure of the economist Prime Minister Manmohan Singh,' BJP spokesman Ravi Shankar Prasad told reporters here.
Communist Party of India-Marxist (CPI-M) leader Sitaram Yechury said the price hike was highly condemnable.
'This is a cruel hoax on the common people,' he told reporters here.
Forward Bloc national secretary G. Devarajan said the government was 'indulging in hypocrisy by increasing the prices of petrol just one day after the assembly poll results'.
The moment the news flashed across the media, petrol stations in the city saw long queues of vehicles with people in a hurry to fill up the tanks before the hiked prices came into effect.
Shweta Arya, consultant in an infrastructure firm, lamented that her transportation budget has spiked in the last one year.
'My petrol expenditure has doubled in the last one year. How will the common man survive after such a price hike,' she wondered.
Vinay Verma, 32, wondered if the government could tolerate corruption among politicians and bureaucrats, which has drained the country's coffers, then why couldn't it also take on the burden of subsidy.
'I know that the hike is because of the international increase in prices. But what angers me is that the government can tolerate scams worth thousands of crores of rupees but fails when it comes to international fuel rates,' lamented Verma, a human resources executive.