Petrol Price Hike in India

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Possible hike in Petrol prices by Rs. 5

A possible hike in petrol prices is to be announced on Friday, September 07, 2012. Oil firms may increase petrol prices by Rs. 5 per litre. As higher crude prices in the global markets, the state-run oil companies are losing Rs. 550 crore everyday. The government may also increase prices of other fuel products, including diesel.

The oil firms are projected to lose Rs 2 crore on selling fuel below cost in this fiscal year.

The companies are currently on a loss of Rs 1.37/litre on petrol, Rs 19.26/litre on diesel, Rs 34.34/litre on kerosene and Rs 347/cylinder of domestic cooking gas. Industry sources said that Prices of diesel, LPG and kerosene have not been increased since June last year, however the cost of production has gone up nearly 28 per cent.

Petrol prices have been hiked on four occasions during this fiscal year. A hike of Rs. 7.54 a litre on May 24 followed by a rollback of Rs. 2.02 per litre on June 3. A reduction of Rs. 2.46 a litre on June 29 and a marginal hike of Rs. 0.70 a litre on July 24.

Petrol Price Hike in Major Indian Cities

The rising prices of petrol have caused the citizens of India more trouble than anything else in the recent past. The ever on increasing prices of petrol are also burning the pockets of the average Indian other than their vehicles. This is one problem against which the government of India has totally succumbed. The inability of the government to do anything in the matter is only adding salt to the wounds of the commoners.

Petrol price cut by 56 Paise per litre

Tuesday, 09 Oct 2012

The state oil firms have cut petrol rates slightly by 56 paise per litre. They disproved the industry expectations of decreasing the price by Re.1 because of the considerable appreciation in the rupee against dollar and reducing international oil prices. Meanwhile, dealers are demanded 57 paise hike in dealers' commission on petrol and 42 paise on diesel. Petrol pump owners are saying that they deserve higher commission since they provide free air and toilet facilities and are open 365 days a year. They say that higher diesel and petrol prices have increased value of fuel lost in evaporation. Also, their working capitals have increased as they need to pay more for fuel purchased. Dealers are currently getting commission of Rs.1.49 a litre on petrol and Rs.0.91 on diesel.

A look at the petroleum prices in India since the beginning of 2011 itself are enough to hint at the graveness of the matter.

The price of petrol in New Delhi, the capital city on 16th January 2011 was Rs. 58.37 per litre. Taking a direct hike of 5 rupees the petrol prices reached 63.37 rupees per litre on 15th May 2011. The government of India made people let go 0.33 more paise from their pockets for petrol following 1st July 2011. The prices of petrol reached 66.84 rupees on 16th September 2011. However, the last assault came on 4th November 2011 when petrol prices reached 68.64 rupees per litre. Mumbai paid 63.08 rupees for petrol till 16th January. The price of petrol in Mumbai on the corresponding dates was 68.33 rupees, 68.62 rupees, 71.92 rupees and 73.81 rupees respectively.

The following table will give you a better idea of petrol price hike in the major Indian cities in the year 2011-2012.

Note: All the above prices are in the unit Rupees/Litre.

The government has clearly stated that it is incompetent to control the rising prices of petrol citing an excuse that since the petrol price is de-regularized, its private oil companies who control the prices of petrol in India. However, this is far from the truth. The oil companies have to pay the international market a fixed price which can’t be negotiated. Moreover, they also have to pay high taxes to the government on import and sale of petrol in India. This is what adds to the cost at which the masses get petrol. Since, we can’t control the International prices, the government has to be liberal with taxes and this is the only way to make petrol available at a reasonable price. But the government seems in no mood to follow this way any time soon rather it is not even considering this as an option.

If the government is unable to do anything, who else should this public turn to? It is high time that an answer be given to this question.

Last Updated on 10/11/2012