New Delhi, Jun 8 (IANS): After Oil companies on Monday increased the price of petrol and diesel by 60 paise per litre, the second such successive raise to cover for the rise in global product prices, former Union Finance Minister P. Chidambaram said,"Government is poor, it needs more taxes.

"Oil companies are poor, they need better prices. Only the poor and middle class are not poor, so they will pay."

He said that fuel prices have been raised twice in two days, following tax hikes two weeks ago. This time to benefit oil companies.

After the hike in the national capital, the retail price of both petrol and diesel stood at Rs 72.46 and Rs 70.59 per litre, respectively. In other cities, the increase could vary depending on the tax structure on products.

The increase has been made under the dynamic pricing system for daily revision of fuel prices, which OMCs resumed after a more than 80-day break during the lockdown period.

Prices of transportation fuel were last revised under the dynamic pricing policy on March 16 and there were few instances of price hike only when the respective state governments hiked VAT or cess.

In a bid to increase revenues during the nationwide lockdown, several state governments raised taxes imposed on transportation fuel.

Already, the gap between cost and sale price of petrol and diesel for the OMCs has reached around Rs 4-5 per litre. If this has to be covered over a period of time, given there is no further increase in the global prices, auto fuel prices may be increased by 40-60 paise per day for a couple of weeks to cover the losses.