New Delhi, Feb.14 : Residents of the capital today reacted with dismay to the Central Government's announcement of a hike in fuel prices from midnight.
While Petroleum and Natural Gas Minister Murli Deora insisted that the hike was not too steep, and added that an adjustment had been made keeping the common man's interests in mind, residents of Delhi like Satpal and Manoj Verma thought otherwise.
Satpal said: "For a person with meager means, a Rs.2 hike will hurt."
Verma said: "The effect would not be on the public transportation system, it would be on the pocket of the common man. But people will continue to use their personal vehicles, they will continue to spend money on fuel despite the price hike, after all the public transportation is not very good."
India has raised prices of petrol and diesel by Rs.2 and Rs.1 respectively for the first time in 20 months to ease the losses of state-run oil firms squeezed by a surge in global crude oil prices while having to sell fuels cheaply.
The decision to raise fuel prices was taken by the Cabinet Committee on Political Affairs (CCPA) at Prime Minister Dr. Manmohan Singh's Racecourse Road residence this morning.
So far, State-controlled oil firms have had to sell widely consumed fuels at a discount to protect consumers and to curb inflation.
The government did not increase prices in 2007 even though crude rose by over 50 percent in the year and topped 100 dollars.
Reacting to the hike in the prices, shares in the Indian state-run-oil firms rose with top refiner Indian Oil Corp extending its gains as much as 10 percent.
India imports about two-thirds of its crude consumption.
The government had been postponing the decision in view of its concerns of its impact on elections due this year and next.
A week ago, Left Front leaders, who provide key outside support to the Manmohan Singh-led UPA Government, had stepped up pressure to stall the hike of petroleum prices, asking the government to restructure the tax structure, re-impose capital gains tax and set up a Farmers Debt Relief Commission.
"Rather than increasing the retail prices of petrol products, the government should initiate the long-pending restructuring of the indirect tax structure on petroleum," CPM General Secretary Prakash Karat had told the media then.