Consumers across the country will now have to spend more on petrol and diesel as after considering all aspects, the Cabinet Committee on Political Affairs has taken deliberate decision here Wednesday on hiking petrol and diesel by Rs 5 and Rs 3 per litre respectively.
The marathon cabinet meeting also taken a decision on cooking gas as a last resort to provide bit of relief to the oil companies constantly complaining the government going under tremendous loss owing to increasing prices in international market. However, the rise in LPG (cooking gas) price might look harsh to housewives as they would have to spend extra time and effort on calculating monthly budget and managing it within their fixed salary.
“The government has decided to marginally increase the price of LPG (cooking gas) by Rs.50 per cylinder,” Petroleum Minister Murli Deora told reporters after the two-hour long cabinet meeting, chaired by Prime Minister Manmohan Singh.
Apart from paying Rs 50 extra per LPG cylinder, the consumers will have to be allowed to purchase only 8 cylinders per annum at subsidised rates, for availing more cylinders, they will have to pay more near-market price. Till today, consumers had to pay Rs 295 per cylinder.
On Monday, Manmohan Singh in his inaugural address to the ASSOCHAM had clearly indicated that hike in petrol prices was inevitable at a time when the government could not further ignore the steep hike in the prices of fuel products in the international market and also could not allow the subsidy bill to rise any further.
“The government now do not have the margin to fully insulate the consumer from the impact of world commodity price and world oil price inflation. Any further subsidies will hamper the economic progress of the country,” the Prime Minister had said.
Officials in the petroleum ministry said that oil companies had been suffering colossal losses to the tune of Rs 2,25,000 crores per annum, which went on soaring further after global crude oil prices peaked to $135 per barrel last week, so the hike could not be averted.
Prime Minister, reportedly, will address the nation on Wednesday's evening explaining the cause for the price rise.
Petrol and diesel prices were last increased in February this year, when the Indian basket of crude oil was at 67 dollars per barrel. Today it is at 135 dollars per barrel. The decision on hike in crude oil and cooking gas will no doubt put the government in deep trouble.
Opposition parties including UPA's ally, Left would leave no stone unturned in carrying out nation-wide agitation against hike and making it poll-issue at a time when the general election was not very far away. The general election is due next year, while assembly elections in five states are due to be held by this year.
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