Diesel, kerosene and cooking gas price hiked; common man, opposition angry (Roundup)

June 25th, 2011 - 12:51 am ICT by IANS  

Pranab Mukherjee New Delhi, June 24 (IANS) After last month’s steep petrol price hike, the common man now will have to suffer an increase in the prices of diesel, kerosene and cooking gas, with the government hiking them by Rs.3 per litre, Rs.2 per litre and Rs.50 per cylinder respectively, with effect from Friday midnight.

The price increase was predictably greeted with anger from the common man and opposition parties, with the BJP and the Left planning a stir against the government.

At the same time, the government also decided to cut down on customs and excise duties on petroleum products.

“Minimal increase in product prices to reduce under-recoveries of the oil marketing companies (has been decided). The price of diesel will be increased by Rs.3 per litre, PDS kerosene by Rs.2 per litre and domestic LPG by only Rs.50 per cylinder, excluding state levies such as VAT,” Petroleum Minister S. Jaipal Reddy said here Friday evening.

He made the announcement after the meeting of the Empowered Group of Ministers (eGoM), headed by Finance Minister Pranab Mukherjee here.

The minister said the decision was necessary, despite the continuing political controversies that have besieged the government.

“We are vibrant democracy involving 1.2 billion people. We will always have some crisis or other. As it is, these minimal decisions have been inordinately delayed,” he said.

He was referring to the repeated postponement of any decision by eGoM, reportedly due to political sensitivities over state assembly elections.

Reddy also announced that there would be slashing of excise duties and customs duties on diesel, which cost the exchequer Rs.49,000 crore. He urged state governments to also decrease their levies on fuel.

He added that while the Friday price hike will decrease the losses suffered by oil marketing companies by Rs.21,000 crore, they would still continue to incur estimated under-recoveries of Rs.1.20 lakh crore this year.

Before the hike, oil marketing companies suffered losses of Rs.13.72 per litre of diesel, Rs.26.16 per litre of kerosene and Rs.381.14 per LPG cylinder.

On a daily basis, Indian Oil, Hindustan Petroleum and Bharat Petroleum, incur a total loss of Rs.456 crore on the sale of the three petro products.

On May 14, oil marketing companies had increased the price of petrol, which have been decontrolled, by Rs.5 per litre - its steepest hike ever.

The hike comes just a day after the government announced that India’s food inflation had soared nearly 10-week high of 9.13 percent for the week ended June 11.

Following the recent dip in international prices, the Indian crude basket Friday was priced at $107.07 per barrel Thursday. The average of the previous fortnight from April 16-30 stood at $112.74 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.

Kiran Devi, a house maid, was upset over the hike of Rs.50 in LPG.

“I just saw the news on TV. The government has no mercy left for the poor. I have other expenses to look after and with this added burden I will be on the verge of crumbling,” said a miffed Devi.

Similarly, 25-year-old Vivek Malik, working in a publication, was equally angry. “Yesterday (Thursday), Pranab Mukherjee said that the government will do something about the inflation. Today they have done ’something’ about the inflation which has battered the common man in this country,” rued Malik.

A major ally of the government, West Bengal Chief Minister Mamata Banerjee, said she does not support frequent fuel price hikes as they put immense pressure on the common people.

“We don’t support this frequent price rise of fuels. This creates lot of problems for the people. We have already conveyed our opinion at the appropriate place,” the Trinamool Congress chief told mediapersons in Kolkata.

The opposition parties were naturally up in arms. Bharatiya Janta Party (BJP) Leader of Opposition Sushma Swaraj tweeted that the decision showed insensitivity on the government’s part. “This is the 10th hike in the prices of petroleum products. Congress government came to power on the slogan ‘Congress ka haath aam adami ke saath.’. This is what the common man has got. This government is totally insensitive to the sufferings of the common man.. The victims are housewives, farmers and poorest of the poor,” she tweeted.

The BJP plans protest at all district headquarters against the fuel price hike Saturday.

Communist Party of India (CPI) leader A.B. Bardhan said that the decision to raise price will affect the common man in the country. “This is one of the greatest attacks on the common man. Due to the hike in diesel prices there will be increase in the transportation cost. Besides this, increase in cooking gas prices will affect the middle class households in India,” he said.

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