Govt hikes petrol and diesel prices;

Thursday 02 July, 2009.

Govt hikes petrol and diesel prices; New Prices to be effective from midnight

Days before the general budget, the government on Wednesday increased petrol and diesel prices by Rs four and Rs two a litre respectively effective from Wednesday, but spared kerosene and domestic cooking gas from a hike.

"The hike was necessitated because of rising international crude oil prices which have doubled to USD 70 a barrel since December," Petroleum Minister Murli Deora told reporters in New Delhi.

The issue was not taken to the Cabinet, as is done generally, but Deora consulted party leadership and Prime Minister Manmohan Singh to decide on the hike.

The decision would help garner Rs 13,000 crore this fiscal, although the oil companies were projecting a loss of Rs 39,000 crore before the hike.

The decision comes ahead of the July 6 budget day. Parliament's budget session is to begin tomorrow and clearly the government wanted to take a decision before that. The weekly Cabinet meeting is scheduled for Thursday.

Deora said the government will not raise the domestic LPG and kerosene prices though the public sector oil companies are losing Rs 92.96 per cylinder and Rs 15.26 a litre respectively.

After the increase, petrol in Delhi will cost Rs 44.62 a litre and diesel Rs 32.86 a litre.