Centre hikes petrol price by Rs.7.50 per litre

New Delhi, May 23 (ANI): The UPA-II Government on Wednesday announced a hike in petrol prices by Rs.7.50 per litre. The hike will be effective from midnight tonight.

The hike in prices means that the price of petrol in Delhi will go up from Rs.65.64 per litre to Rs.73.14 per litre. In Mumbai, the price will go from Rs.70.66 per litre to Rs.78.16 per litre. In Kolkata, the price will go from Rs.70.03 per litre to Rs.77.53 per litre In Chennai, the price will go from Rs.69.55 per litre to Rs.77.05 per litre.

State-owned oil companies have decided to raise petrol price by Rs 6.28 per litre excluding local sales tax or VAT. The hike translates into Rs 7.50 per litre in Delhi and is the steepest ever.

Wednesday's decision to hike petrol prices comes a day after the end of the Budget Session of Parliament. The Government had been thinking about hiking petrol prices since September and October of last year, but deferred the decision first on the pretext of assembly elections in several states, and then again due to the Budget Session of Parliament, which was held in two parts.

Opposition parties and even those supporting the UPA-II regime from outside criticized the decision to hike petrol prices to such an unprecedented level.

The Samajwadi Party (SP), which offers outside support to the government, said that the latter must address the issue of an unprecedented volatility in prices, including fuel prices.

The Bharatiya Janata Party accused the government of being "insensitive" to the needs of the "Aam Aadmi" or common man.

It said that the government appeared to be running out of ideas. The BJP said that the political opposition to the hike would be telling.

Earlier, the Left also had said that it would oppose proposed fuel price hike

It said that any hike would be a cruel blow to the people who are already reeling under price rise of other essential items.

The Left parties - CPI (M), CPI, RSP and Forward Bloc-said they "strongly" oppose the proposed increase.

The Left parties said that they would immediately organise protests to counter the price hike.

Petroleum and Natural Gas Minister S Jaipal Reddy had said on Tuesday that there was an immediate need to raise fuel prices due to a jump in the oil import bill.

"It (price increase) is very essential but (before hiking rates) we have to talk to political parties," he said on Tuesday.

"If rupee depreciates by one against the US dollar, our oil companies lose Rs. 8,000 crore (annually)," Reddy added.

The government had decontrolled petrol price in June 2010 but rates were increased on November 4 last year. This despite oil price rising by 14 per cent and 7 per cent fall in value of rupee against the US dollar.

Petrol price were last revised on December 1 when they were cut by Rs 0.65 a litre to Rs 65.64 in Delhi. Price of gasoline in the international market, against which the domestic rates are benchmarked against, was $109.03 a barrel at that time.

Today they are around USD 125 per barrel. The rupee had averaged 51.50 to a US dollar. Today is it over 55 to a US dollar.

The three oil firms had together lost Rs 138,541 crore in revenue in 2011-12. This year they are projected to lose a record Rs 193,880 crore.

Price of diesel, kerosene and cooking gas were raised in June 2011.

State-owned oil firms, who had in the fiscal ending March 31, 2012 lost Rs 4,860 crore on petrol sales, are currently losing Rs 6.28 per litre on petrol.(ANI)