Diesel up by 45p, petrol down 25p

Last Updated: Fri, Jan 18, 2013 18:37 hrs

State-run oil firms have hiked diesel price by 45 paise per litre to be effective from Friday, prompting the political parties both within and outside the ruling coalition umbrella to slam the Congress-led United Progressive Alliance (UPA) regime.

Giving minor relief to consumers, the petrol price was on the other hand decreased by 25 paise per litre that also came into effect from Friday.

Pertinently, petrol prices were hiked by 35 paise a litre from Wednesday.

The announcement was made by the companies after the government, which otherwise controls the subsidized retail price of diesel, on Thursday allowed the retailers to raise the price in small amount every month or time to time, thereby deregulating the prices partially.

Announcing the hike, state-run Indian Oil Corporation (IOC) said in a statement: "HSD (diesel) price shall stand increased by 0.45 paise per litre litre (excluding VAT) w.e.f. midnight of 17-18, January, 2013."

On petrol prices, it said: "MS price shall stand decreased by 0.25 paise per litre (excluding VAT) w.e.f. midnight of 17-18, January, 2013."

"As a result of the above, the under recoveries on HSD both bulk and retail shall decrease by approx. Rs.3400 crore till March 2013. Based on the current prices and volumes, the decrease in the under-recoveries on annual basis on HSD shall be approx. Rs.15000 crore for OMCs as a whole," IOC said.

Meanwhile, political parties, including UPA government´s key alliance partners, criticised the government over the diesel price rise issue.

Dravida Munnetra Kazhagam (DMK), which is a key ally of the Congress party at the Centre and the second largest constituent of the ruling UPA coalition, slammed the government over the matter and urged it to ´reconsider´ its decision to allow the retailers to raise diesel price in small amount.

DMK chief M Karunanidhi said in a statement: "The Centre should reconsider its decision. The decision of giving the oil companies the authority to increase price is wrong. The steady increase will affect poor and middle class and will have a cascading effect."

Criticising the Centre, Bahujan Samaj Party (BSP) chief Mayawati on Friday said: "It is an anti-people decision by the government."

She said the government has become one which only works for the rich and not the poor.

Pertinently, the BSP supports the UPA from outside.

Trinamool Congress (TMC) MP Derek O´Brien tweeted: "Push the diesel prices up now and then present a goody-goody budget.Some old Congress tricks never die."

The hike, however, has cheered markets as the BSE Sensex touched the 20,000-mark in morning trade on Friday.

The 30-share benchmark index stood at 20046.33 at around 1 pm.

The broader 50-share National Stock Exchange (NSE) Nifty index stood at 6066.05 at around 1 pm.

On Thursday, announcing the liberalisation of the diesel rates the union cabinet also announced a decision to hike the number of subsidised cooking gas LPG cylinders from six to nine in a year, providing a minor relief to consumers.

The move on LPG cylinders, which is interpreted by many as a populist gesture by the UPA government which had earlier reduced the subsidy angering consumers at large, would come into effect from April 1.

The decision was approved in a meeting of the Cabinet Committee on Political Affairs (CCPA).

Petroleum and Natural Gas Minister M Veerappa Moily told reporters: "I am happy to inform the Cabinet Committee on Political Affairs has decided to raise the cap on subsidised LPG to nine cylinders per household in a year from existing six cylinders."

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