Daijiworld Media Network
New Delhi, Jun 24: The UPA government's decision to hike the price of fuels has been met with severe criticism from various quarters.
Tamil Nadu chief minister J Jayalalithaa slammed the hike, calling it intolerable and beyond the means of poor people who are the main consumers of kerosene.
Noting that the hike in diesel would lead to a subsequent increase in transport charges too, she said that it will ultimately result in a hike in other products too. She demanded an immediate roll back of the price hike.
The opposition BJP too issued a statement flaying the move and alleging that the goverment was 'no more for the aam aadmi' and warning of further inflation.
UPA ally Trinamool Congress too said it was against the hike. "We don't support this frequent price rise of fuels. This creates lot of problems for the people," the Trinamool Congress leader Mamata Banerjee told reporters.
The Left parties in West Bengal also condemned the price hike and threatened to start a mass movement in protest.
"The price rise was halted for the assembly elections in five states. Now that the elections are over they have raised the prices. We condemn this," Communist Party of India-Marxist (CPI-M) state secretariat member Rabin Deb said.
On Friday June 24, the prices of diesel, LPG and kerosene were increased by the government.
With effect from Friday June 24 midnight, diesel would be costlier by Rs 3, LPG by Rs 50 per cylinder, and kerosene by Rs 2 per litre.
Just last month, the price of petrol was hiked by Rs 5 per litre.
The hike works out to 7.9 percent for diesel, 14.4 percent for LPG and the highest - 22 percent - in the case of kerosene.
"The price of diesel will be raised by Rs 3 per litre, PDS kerosene by Rs 2 per litre and LPG by Rs 50 per cylinder," Reddy told reporters.
The move comes in the wake of losses incurred by state-owned oil firms, which lose Rs 15 per litre on diesel, Rs 27 per litre on kerosene and Rs 381 per LPG cylinder. The price hike will raise Rs 21,000 crores.
Customs duty on fuel products has also been reduced by 5 percent, while the excise duty on diesel has been reduced from Rs 4.60 per litre to Rs 2 per litre, entailing a revenue loss of Rs 23,000 crore to the government for the full fiscal year.
The price hike was imminent after the meeting between petroleum minister Jaipal Reddy, Pranab Mukherjee and the Prime Minister earlier this month. Indian Oil, Bharat Petroleum and Hindustan Petroleum buy crude oil at market rates but sell diesel, kerosene and LPG at government-subsidised prices, which results in a loss of thousands of crores.
The price hike has been approved by the Empowered Group of Ministers (EGoM) headed by finance minister Pranab Mukherjee.