Hysterical petrol high, historic Rs low

May 24, 2012 - Pawan Bali |

New Delhi

Public sector oil companies raised the petrol price on Wednesday by Rs 6.28 per litre, excluding local taxes, sending shock waves across the country. It is the biggest single hike in fuel prices.

In Delhi, the petrol price was hiked by Rs 7.54 per litre to Rs 73.18 per litre. In Chennai, petrol is up Rs 7.98 and will now cost Rs 77.53 per litre.
Since sales tax or VAT varies from 15 per cent to 33 per cent state to state, an additional Rs 0.94 to Rs 2.07 per litre will be added to the hike of Rs 6.28 per litre.
IOC said the loss it suffered in the current fiscal would require an additional increase of around Rs 1.50 per litre of petrol for the rest of the year.
There is speculation that the government may also take a decision on hiking diesel and LPG prices, and of an EGoM meeting on Friday to discuss hiking the prices of other fuels.
Due to the difference between petrol and diesel prices, there has been a huge increase in diesel car sales.
The government wants to narrow this difference so that people don’t get arbitrage opportunity. Currently, oil companies are losing around Rs 13 per litre of diesel and around Rs 480 on every domestic LPG cylinder.

Comments

What sort of economic

raghubir Singh

25 May 2012 - 07:26

What sort of economic management it is where losses if any- on subsidizing kerosene, diesel ,cooking gas and above all to increase revenue on the sly are made good by unaffordable hikes on gasoline only? LPG, petrol, diesel, ATF, kerosene, lube, tar etc all are products of fractional distillation and are separated based on the range of the boiling points of the crude during refining process. At least petrol, kerosene & diesel need to be priced almost at uniform rates if there were no competitive politics. Of these kerosene supposed to be used by the poor seldom reaches the real user but ends up mostly with the adulterators. In the present price of say Rs 80 per litre of petrol roughly Rs 25-30 goes towards taxation only making it a is major source of revenue? Best option should be to remove all controls on the petroleum products and subsidies on kerosene/cooking gas/diesel be given in cash which can be deposited in post office or bank accounts of the affected people in the BPL zone, marginal farmers & even house wives close to the election times?

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