Government’s petrol bomb explodes
24 May 2012 9:50 AM GMT
With the rupee on a free fall against the dollar for more than a week, the petroleum product price hike was an inevitability, even if it meant that the very common people of the country the United Progressive Alliance (UPA) government made a part of its manifesto suffers the most out of it. The hike triggered a wave of protests all over the country, with people and politicians, including the UPA allies, slamming the government move. The corporate bodies, predictably, welcomed the decision.
Added to this the price volatility of the West Asian crude due to military threats to Iran and feverish oil futures speculation at the Chicago-based NYMEX market, globally the oil prices were on the rise. The industry saw a reason in these factors. 'The inflationary impact of such an increase is ... transitory. It can be mitigated by reduction in taxes by the Central and state governments,' the Federation of Indian Chambers of Commerce and Industry said in a statement.
The UPA government allowed the oil price hike by the oil-marketing organisations (OMCs) on Wednesday. Indian Oil Corporation (IOC) stated in a press release: 'Given the losses being incurred, the Company is compelled to increase the price of MS (Motor Spirit or Petrol) by Rs 6.28 per litre (excluding VAT / Sales Tax).' This price hike will take effect from the midnight of Wednesday.
The real hike for Delhiites will be much more though. At Rs 7.50 per litre, it will be a result of the state taxes over and above the hike in prices by oil companies. The other metros will see a similar but different hike.
The IOC also held out a threat of a further hike, '[The current oil price rise] excludes losses already suffered till date during current financial year i.e. 2012-13, which would require an additional increase of around Rs 1.50/ litre in selling price of MS for balance part of the year.'
The corporate affairs minister M Veerappa Moily justified the decision, pointing out at the fiscal deficit and an economic situation 'going out of hand'. He said the price rise was 'most minimal'.
The oil companies claim that they have been losing Rs 8,000 crore per annum, as they were being forced to sell petrol at subsidised rates.
The petroleum and natural gas minister S Jaipal Reddy had said on Tuesday that the depreciation of the rupee had necessitated an immediate increase in fuel prices.
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We cannot accept the petrol price hike. It is unjust and unilateral. It was done without our knowledge. We don't want to topple the government, like the CPI(M).
Mamata Banerjee, TMC
The petrol price hike reflects a mismanagement of the economy. We should hold the government allies equally responsible for this anti-aam aadmi policy.
Sidharth Nath Singh, BJP
The government should rethink its decision. All parties should get together, discuss this issue and raise their voices against this.
Shahid Siddiqui, SP
Added to this the price volatility of the West Asian crude due to military threats to Iran and feverish oil futures speculation at the Chicago-based NYMEX market, globally the oil prices were on the rise. The industry saw a reason in these factors. 'The inflationary impact of such an increase is ... transitory. It can be mitigated by reduction in taxes by the Central and state governments,' the Federation of Indian Chambers of Commerce and Industry said in a statement.
The UPA government allowed the oil price hike by the oil-marketing organisations (OMCs) on Wednesday. Indian Oil Corporation (IOC) stated in a press release: 'Given the losses being incurred, the Company is compelled to increase the price of MS (Motor Spirit or Petrol) by Rs 6.28 per litre (excluding VAT / Sales Tax).' This price hike will take effect from the midnight of Wednesday.
The real hike for Delhiites will be much more though. At Rs 7.50 per litre, it will be a result of the state taxes over and above the hike in prices by oil companies. The other metros will see a similar but different hike.
The IOC also held out a threat of a further hike, '[The current oil price rise] excludes losses already suffered till date during current financial year i.e. 2012-13, which would require an additional increase of around Rs 1.50/ litre in selling price of MS for balance part of the year.'
The corporate affairs minister M Veerappa Moily justified the decision, pointing out at the fiscal deficit and an economic situation 'going out of hand'. He said the price rise was 'most minimal'.
The oil companies claim that they have been losing Rs 8,000 crore per annum, as they were being forced to sell petrol at subsidised rates.
The petroleum and natural gas minister S Jaipal Reddy had said on Tuesday that the depreciation of the rupee had necessitated an immediate increase in fuel prices.
---
We cannot accept the petrol price hike. It is unjust and unilateral. It was done without our knowledge. We don't want to topple the government, like the CPI(M).
Mamata Banerjee, TMC
The petrol price hike reflects a mismanagement of the economy. We should hold the government allies equally responsible for this anti-aam aadmi policy.
Sidharth Nath Singh, BJP
The government should rethink its decision. All parties should get together, discuss this issue and raise their voices against this.
Shahid Siddiqui, SP
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