Petrol price hiked by Rs 4 a litre, Diesel Rs 2
New Delhi, June 5: The government today hiked the price of petrol by Rs four a litre and diesel by Rs two a litre.
It, however, decided to spare kerosene and LPG from the hike.
The decision was taken by the Union Cabinet despite strong opposition by the supporting Left parties which had threatened a countrywide agitation if the UPA government went ahead with the hike in prices of fuel products for the fifth time.
The hike will come into effect from midnight tonight.
After the Cabinet meeting, Petroleum Minister Murli Deora said it was the minimum increase the government could make. By leaving prices of kerosene and cooking gas, the government has spared the weaker sections, he added. He said the customs duty for petroleum products had been restructured.
Petrol in Delhi will now cost Rs 47.49 a litre, while diesel will cost Rs 32.45 a litre.
Mr Deora said the customs duty on petrol and diesel had been reduced by 2.5 per cent from 10 per cent to 7.5 per cent. The government is issueing oil bonds and the quantum is being worked out. For quite some time, public sector oil companies had been demanding a hike as they had been incurring a loss of Rs 30,000 crore since last year owing to the massive increase in the international crude oil prices.
The last revision was made in September 2005. Since then the government had kept the prices unchanged under pressure from the Left parties whic said any hike would hurt the economy and the poor.
The oil marketing companies-- Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and IBP-- say they are losing Rs 6.51 per litre on petrol and Rs 6.66 per litre on diesel for selling these products below cost.
They are also losing Rs 16.13 per litre on kerosene and Rs 115 per cylinder on cooking gas. Collectively, the projected burden on OMCs is about Rs 73,500 crore for 2006-07.
Thus, the hike has been effected to meet the under recoveries of Rs 73,500 crore, government sources said.