Petrol price up 7.54 to 73.18, sharpest hike ever: UPA Allies Call It Unilateral, Ask For Rollback

  • 23/05/2012

  • Times Of India (New Delhi)

New Delhi: By the time you read this, the price of petrol would have gone up by more than Rs 7.50 a litre across the country. The increase, the steepest-ever, came a day after Parliament’s Budget session ended and PM Manmohan Singh talked about the need for “difficult decisions”. After adding state taxes, petrol will cost Rs 73.18 a litre in Delhi, Rs 78.57 in Mumbai, Rs 77.88 in Kolkata and Rs 77.53 a litre in Chennai. This marks an increase of around 10% and puts a squeeze of about Rs 6,000 a year on a family that spends an average of Rs 5,000 per month on petrol. This is the first upward revision in petrol prices since November 4, 2011. The highest increase till now had been Rs 5 per litre. State-run oil marketers twice raised prices by this amount — on May 15, 2011 and May 24, 2008 when petrol crossed the Rs 50 a litre mark for the first time. The decision immediately drew howls of protest and demands for rollback from parties across the political spectrum, including UPA allies such as Trinamool Congress chief Mamata Banerjee. But the West Bengal chief minister also made it clear she would not rock the UPA boat. Consumers too voiced their anguish even as they thronged petrol pumps for a “cheaper” tank-up one last time. Police had to be called in to control the spiraling queues in many pumps in Delhi and elsewhere. The announcement came while oil minister S Jaipal Reddy was away in Turkmenistan to sign a four-nation gas pipeline deal. Cong gambles with middle-class patience By going for the steepest ever hike in petrol prices, the government seems to be testing the patience of the middle class, already rattled over price rise, the falling rupee and as the PM admitted, over corruption. But the timing of the shocker of a raise, after seven-and-a-half months, seems political. The next political challenge, elections in BJP-ruled Gujarat and Himachal, is in November and the Congress is hoping the angst will die down by then or better still, the middle class will come to terms with the ‘new normal’ in petrol prices. P 15 Expect a 1.50 cut in petrol price by June Consumers can look forward to a cut of more than Re 1 in petrol prices by the end of this month, given the trend in the Singapore bulk market. Indeed, government sources said the reduction was already factored in by the state-run oil firms. “Unless there’s any more dramatic fall in the rupee’s value against the dollar, a reduction of 1 or 1.50 per litre is quite certain. After adding taxes, the actual reduction at pumps would be around 2 a litre,” a source said. If that happens, expect the government to take credit. P 17 Why oil marketers say price hike was unavoidable 1 Every 1 drop in rupee’s value against dollar adds 8,000 crore import burden on oil marketers. Pre-hike pump prices corresponded to $109/barrel of petrol in regional bulk markets. The average price in the first fortnight of May was $124/barrel 2 Crude prices fell to a 7-month low near $91 a barrel on Wednesday. But this refers to Brent crude in Singapore, not Indian mix of imports The govt has failed to manage the economy. Otherwise why should it have to hike petrol prices when international crude prices have been sliding... It is unjust and unilateral. We will demand a rollback MAMATA BANERJEE | TRINAMOOL These decisions are not discussed with the allies M KARUNANIDHI | DMK It’s atrocious and unbelievable. The UPA govt on its third anniversary has given the gift of fuel hike to the people PRAKASH JAVADEKAR | BJP Price hike fuels anger even among Cong allies Mamata Slams UPA ‘Mismanagement’, MSY Says It’s Govt’s Gift To People New Delhi: Angry UPA partners did some tightrope walking on the Centre’s sudden announcement of a monstrous petrol price hike, but key Congress’s alliance partner, Trinamool Congress, pulled no punches, calling the hike a result of “mismanagement of the economy”. A somewhat muted DMK demanded an immediate rollback. But Samajwadi Party supremo Mulayam Singh Yadav, who on Tuesday shared the dais with the UPA leadership at the Prime Minister’s dinner, sarcastically said that this was the government’s gift to the people. “We feel let down. I learnt of the hike from the media,” said a bristling Mamata Banerjee. “Why are alliance partners kept in the dark? Many important issues are not discussed before they are implemented. This is unfortunate,” she said. Mamata also stressed that “something major was wrong with the economy” and that the UPA was mismanaging it. She also questioned the timing of the massive petrol price hike. “The government could have given a hint during the Parliament session. It hiked the prices a day after the House was adjourned,” she said. At the same time, she said would not pull out of the UPA for the sake of political stability. “We are not going to pull out of the UPA and topple the government,” she said, adding, “That would add to the political instability and force another election which will again lead to economic instability. We are committed to supporting the UPA for five years. But that does not mean we won’t raise our voice.” Mulayam Singh slammed the Centre saying, “The hike is the UPA’s gift to the people on its completion of three years in office.” Opposing the price hike, RJD leader Lalu Prasad said he would soon meet finance minister Pranab Mukherjee and demand a roll-back. “The increase in the price of petrol is an additional burden on people already badly hit by price rise,” said Lalu. DMK chief M Karunanidhi also said his party MPs would ask the Centre for an immediate roll-back. He, however, was muted in his criticism. Asked whether the Centre had consulted the DMK before the price hike, Karunanidhi said, “Such decisions are not discussed with allies. Certain decisions are taken depending on the situation.” Karunanidhi pointed out that Tamil Nadu chief minister J Jayalalithaa, too, did not consult her allies before hiking the price of certain commodities and services. Jayalalithaa called the hike anti-people and blamed the UPA’s ‘wrong economic policies’ for price rise, the rupee’s depreciation and the economic slowdown. “The hike could have been avoided by reducing the profit of the government and private oil companies,” she said. “I urge the Centre to roll back the hike immediately. Otherwise, the tears of the people will become a weapon that would cause the fall of the anti-people Congress coalition soon,” warned Jayalalithaa. Long queues at a fuel pump on Wednesday