Get ready for a hike in prices

NEW DELHI: In one of the steepest hikes ever, the government on Wednesday jacked up fuel prices by Rs 4 a litre for petrol and Rs 2 for diesel,triggering ominous talk of freight-rate hike by transporters. This means, apart from a hike in your car-running bill, vegetables and food items, will become even costlier. The dark talk of a petrol-diesel price hike had been on for a while, although some felt it was aimed at persuading the finance ministry to cut back the tax on fuel. But with international crude prices rising to a seven-month high of around $73, and the finance ministry worried about a growing fiscal deficit, the government has finally bitten the bullet.

As with several hikes in the past, cooking gas and kerosene have been spared. But truckers and transporters promptly announced they would pass on the burden by raising freight rates. IFTRT said truck rentals would go up 3-4% and retail freight rates 20-25%. Bus and taxi fares in cities like Delhi and Mumbai which have switched to CNG won't rise as CNG prices are unchanged.

This is the first fuel price increase effected by UPA-2. Petrol and diesel prices were last raised by Rs 5 and Rs 3 a litre, respectively, in June 2008. They were reduced by Rs 10 for petrol and Rs 4 for diesel in two equal instalments in December and January.

Wednesday's decision was taken without consulting the Cabinet or Cabinet Committee on Political Affairs comprising UPA partners. Oil minister Murli Deora announced it after running it past PM Manmohan Singh and the Congress core group.

The decision not to take shelter behind consensus was seen as Congress's confidence to explain the unavoidability of the hike on grounds of rising international oil prices. It also reflected a desire to avoid a price hike close to Maharashtra assembly elections in September-October.

The Congress was quick to defend the decision of fuel price hike, with party spokesperson Manish Tiwari saying, ''These are hard decisions that need to be taken in the national interest.'' Announcing the decision a day before Parliament's Budjet starts, oil minister Murli Deora said: "The hike has been necessitated because of rising international crude oil prices which have doubled to $70 a barrel since December". Petroleum secretary R S Pandey described the increase as an "ad-hoc" decision aimed at limiting the losses of state-run oil marketing companies and not deregulation of pricing.

Deora pointed out that cooking gas and kerosene prices were being left unchanged even though the state-run marketers were losing about Rs 93 on each gas cylinder and a tad over Rs 15 on a litre of kerosene. The government will absorb a Rs 30,000 crore loss on kitchen fuels, he said.
Source - The times of India

What ever it may be the reason the people should takes this burden.