Fuel Shock in India: Petrol Price Raised by Rs.7.50 Per Litre

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The unreasonable petrol hike which is raised by more than Rs.7.50 per litre across the country is making the life of common man ‘miserable’. This is the steepest hike in past six months, the previous hike being Rs.5 per litre on November 4, 2011. This decision made by UPA government immediately resulted in the announcement of nation-wide bandh on May 31 by NDA.

In India, we can observe oil price rising by 14.5% because of rupee’s fall against dollar at 3.2%. According to the oil minister, depreciation in rupee had necessitated an immediate increase in fuel prices. Government has decontrolled petrol prices in 2010, but rates were increasing last since November 2011.

The petrol price in Delhi has been raised by Rs.7.54 per litre from Rs.65.64/litre to Rs.73.18/litre. The following table shows present and previous petrol prices in various cities across India.

Cities	Previous rate/litre	Present rate/litre	Increased by
Hyderabad	Rs. 73.08	Rs.81.44	Rs.8.36
Chennai	Rs.69.55	Rs.77.53	Rs.7.98
Mumbai	Rs.70.66	Rs.78.57	Rs.7.91
Kolkata	Rs. 70.03	Rs.77.88	Rs.7.85
Delhi	Rs. 65.64	Rs. 73.18	Rs. 7.54
Bangalore	Rs.73.51	Rs.81.01	Rs.7.50

Indian oil Minister said that if rupee still depreciates by one against dollar, then oil companies will lose Rs.8,000 crore for every one low value. Last year the value of rupee was Rs.46 against a dollar. This year it has dipped to all-time low value of Rs.55. This results in a loss of Rs.72,000 for now.

The rates of diesel, kerosene and cooking gas have not been revised for now. The loss for petrol prices is Rs.512 crore per day that oil firms lose on selling diesel, kerosene and domestic cooking gas LPG. Currently diesel is sold at a loss of Rs.15.35 per litre and kerosene at a loss of Rs.32.98 per litre and 14.2-kg domestic LPG cylinder at a loss of Rs.479.