New Delhi, Sep 15 Petrol prices were hiked for the 10th time since June 2010, by a little over Rs.3 a litre from Friday, as India's oil retailers sought to pass most of the burden of the falling value of the rupee and high crude prices on to consumers.
Petrol will now cost Rs.66.84 in the national capital, Rs.71.76 in Mumbai, Rs.70.64 in Chennai and Rs.71.15 in Kolkata. Prices of diesel and other transport and cooking fuels, that are still controlled by the government unlike gasoline, were left untouched.
The latest hike of Rs.3.14 per litre -- the 10th time since June 2010 -- comes over and above a steep upward revision of Rs.5 a litre in May.
"This is really crazy. The government is punishing the middle class. Look at the prices of fruits and vegetables. Then milk, then electricity and now petrol. Every thing will shoot up again," said R.S. Sharma, an accountant with a private firm.
The latest data on India's wholesale price index placed the annual rate of inflation at 9.78 percent, which Finance Minister Pranab Mukherjee described as "bad news" and hoped it would come back to the government's comfort zone soon.
An official in the petroleum ministry confirmed the decision taken by state-run Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd, and added that they had lost Rs.2,450 crore thus far this fiscal by selling petrol below cost.
Petrol prices were freed from government control in June last year, thus allowing the oil retailers to revise prices as the situation demanded. Officials, nevertheless, said the government was kept in the loop.
The hike comes against the backdrop of the Rupee's value falling below 48 to a dollar for the first time in almost two years, while global crude prices -- especially the Indian basket -- hovered around $111 a barrel in the first fortnight of September.
Officials said diesel was still being sold at a subsidy of Rs.6.05 a litre, kerosene subsidised Rs.23.25 per litre and cooking gas Rs.267 for a 14.2-kg cylinder. On these three oil products, the losses are estimated at Rs.65,000 crore so far this fiscal.
The prices of these three fuels were raised by the government in June by Rs.3 per litre, Rs.2 per litre and Rs.50 per cylinder, respectively.
In June last year, following de-control of petrol prices, oil firms had increased prices by Rs.3 per litre. Then, another substantial price rise took place in December 2010 and January this year, when companies had hiked the price by around Rs.3 per litre.