More hikes likely, Inflation fears, Fuel prices on freeze for 137 days
New Delhi: The prices of petrol and diesel were increased on Tuesday by 80 paise per litre while that of domestic cooking gas LPG were hiked by Rs 50 per cylinder, fanning inflation fears. The rates, which differ from state to state depending on the local taxes, are likely to continue to rise over the next few days as the state oil companies recoup losses from keeping prices on hold for a record 137 days. Accordingly, petrol in Delhi will now cost Rs 96.21 per litre as against Rs 95.41 previously, while diesel prices have gone up from Rs 86.67 per litre to Rs 87.47. In Mumbai, the petrol price was hiked by Rs 0.84 per litre to Rs 110.82, and diesel by Rs 0.86 to Rs 95.
Simultaneously, the price of non-subsidised LPG cylinders was increased to Rs 949.50 per 14.2-kg bottle in Delhi and Mumbai, and to Rs 976 in Kolkata. A 5-kg LPG cylinder will now cost Rs 349, while the 10 kg composite bottle will come for Rs 669. The 19-kg commercial cylinder now costs Rs 2,003.50.
While LPG rates were last revised on October 6, 2021, petrol and diesel prices had been on freeze since November 4 as five states, including Uttar Pradesh and Punjab, went to the polls. LPG prices had gone up by close to Rs 100 per cylinder between July and October 6, 2021, before criticism halted the monthly revision in rates.
This increase comes shortly after the price of aviation turbine fuel was hiked by a record 18.3 per cent.
The Opposition parties on Tuesday created a ruckus in both Houses of Parliament and even staged a walkout seeking a discussion and rollback of the price hike, due to which the Rajya Sabha was adjourned till 2 pm. In the Lok Sabha, the Congress, Trinamul Congress, NCP, DMK and Left party members raised slogans from their seats against the fuel hike before staging a walkout. Raising the issue after Question Hour, Congress leader Adhir Ranjan Chowdhury said the Opposition parties had been claiming the prices of diesel and petrol would increase after the election process. The Opposition had earlier too tried to raise the issue of as soon as the Lok Sabha met for Question Hour, but were disallowed by Speaker Om Birla, who told them to raise it during Zero Hour.
“We said there will be an exorbitant rise in fuel prices after the Assembly elections, and we’ve been proven right. We’ll stand against this for the common people both outside and inside the Lok Sabha,” said Mr Adhir Ranjan Chowdhury.
In the Rajya Sabha, TMC MP Dola Sen gave notice for suspension under Rule 267 to discuss the issue of “Rising prices of kerosene oil and LPG” while Congress MP Manickam Tagore gave notice of an adjournment motion in the Lok Sabha to discuss the hike in the price of LPG cylinders.
“Congratulations to PM Modiji for achieving his ‘target’ of Rs 1,000 per LPG cylinder in most parts of the country. There will now be daily ‘vikas’ in petrol and diesel prices as well. The only affordable things under the Modi government are communalism and hatred. Everything else is expensive,” Leader of the Opposition in Rajya Sabha Mallikarjun Kharge said in a tweet.
Attacking the price hikes, Samajwadi Party chief Akhilesh Yadav said: “Another gift of inflation from the BJP government for the public... LPG cylinder in Lucknow is close to Rs 1,000 and in Patna above Rs 1,000! Elections over, inflation begins.”
TMC’s Saket Gokhale said with dealer commissions and GST, a cylinder now costs Rs 1,000. “Kerosene prices doubled in just 10 days. When asked in Parliament, govt is flustered. In India, hate films are tax-free while hunger of poor is taxed.”
Non-subsidised cooking gas is what consumers buy after exhausting their quota of 12 cylinders at subsidised or below market price. However, the government gives no subsidy on LPG in most cities and the price of the refill consumers, including poor women who got free connections under the much-talked Ujjwala scheme, undertake is the same as non-subsidised or market price LPG. This is the highest rate that subsidised LPG users will pay. The non-subsidised rate had peaked at Rs 1,241 in January 2014, but at that time, the government provided as much as Rs 600 per cylinder in subsidy.
The direct LPG subsidy was stopped by the Central government from May 2020. A small sum is paid to cooking gas users in far-flung areas to compensate for higher freight. The resumption of fuel price hikes has fanned concerns of stoking inflation, which is already above the targeted level of six per cent.
Both LPG and auto fuel prices had been on freeze despite the cost of raw material spiralling, first because of demand returning with economies globally -- rebounding from the pandemic-induced slowdown, and then due to the Russia-Ukraine crisis.
India relies on overseas purchases to meet about 85 per cent of its oil needs, making it one of the most vulnerable in Asia to higher oil prices. The twin blows of oil prices, already up more than 60 per cent this year, and a weakening rupee may hurt the nation’s finances, upend a nascent economic recovery and fire up inflation. Petrol and diesel prices need to be increased by up to Rs 25 a litre for fuel retailers to cover the losses they incurred when they kept rates on hold despite a rise in the cost of raw material, industry sources said.