[BaCkSeAtDrIVeR]

Petrol up by Rs. 3.6, diesel by Rs. 2., and LPG up Rs. 35/- a cylinder. Kerosine is up by Rs. 3/-.

<sarcasm>

Those in Kerala can expect a bandh shortly.

Source.

http://beta.profit.ndtv.com/news/sho...ntrolled-78081

[sidindica]

Shock! Petrol, diesel, LPG, kerosene prices shoot up : Rediff.com Business

Petrol will now cost Rs 3.73 per litre more, while diesel prices have been increased by Rs 2 a litre.
Also, your cooking gas cylinder will now cost Rs 35 more, while kerosene will be priced Rs 3 per litre more.
The government on Friday decontrolled petroleum prices to bring fuel costs in line with global oil rates after an Empowered Group of Ministers, headed by Finance Minister Pranab Mukherjee, met for the second time in less than three weeks to decide on raising fuel prices. Railway Minister Mamata Banerjee was absent again.
Announcing the hike in prices, oil secretary S Sundaresan said that the prices of petrol and diesel prices will be market-driven. He also said that the government had taken the decision as 'consumers can afford higher prices'.
Banerjee and Agriculture Minister Sharad Pawar had abstained from the first meeting of the eight-member EGoM on June 7 that was to decide if petrol and diesel prices can be freed from government control, along with hikes in domestic LPG and kerosene rates.
Their absence then was attributed to opposition to increase in rates of diesel and cooking fuel and the EGoM postponed a decision.

The government panel went with Petroleum Minister Murli Deora's proposal to free petrol prices from government control triggering a hike of Rs 3.73 a litre.
There was near-unanimity on bringing about market-linked prices for petrol, a fuel generally used by the well-off, but it remains to be seen if the Rs 3.73 per litre hike would come into effect immediately or in two equal installments.
However, sources said that the government was divided over freeing diesel prices as the fuel was used by the transport and agriculture sector and, therefore, would have an impact on the already high inflation rate.
The EGoM finally settled for a Rs 2 per litre hike in diesel rates instead of the Rs 3.80 hike needed to make it market-linked, they said.
The Rs 35 per cylinder hike in domestic LPG rates and a Rs 3 per litre hike in kerosene prices was, however, quite surprising as these needed to pass the muster of Banerjee and Pawar.

With global crude oil trading at below $80 a barrel, Deora was seeing this as the last opportunity to usher in reforms in the sector which, otherwise, would need Rs 74,300 crore (Rs 743 billion) in doles to bridge the gap between retail prices and import costs.
Freeing of petrol prices would reduce the Rs 74,300-crore deficit by about Rs 5,000 crore (Rs 50 billion). A one rupee per litre hike in diesel prices cuts losses by Rs 3,800-4,000 crore (Rs 38-40 billion).
While Pawar was part of Friday's meeting, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Transport Minister Kamal Nath were absent as they are away on official visit.
Oil Minister Murli Deora, Power Minister Sushilkumar Shinde and DMK leader and Fertiliser Minister M K Alagiri were present.
Banerjee late on Thursday evening met Mukherjee ostensibly to discuss the imperatives of fuel price hike. Some say she may have informally agreed for a hike in petrol prices and her absence from the EGoM on Friday may be to serve her political goals in West Bengal by remaining disassociated with the decision.

Breaking news here:The Economic Times: Business News, Personal Finance, Financial News, India Stock Market Investing, Economy News, SENSEX, NIFTY, NSE, BSE Live, IPO News

"diesel prices to be ultimately market driven."

[vnk77]

With taxes the effective hike would be almost Rs. 5 here in Bangalore, this will bring up the prices to Rs. 59+ just about same as what you get in Shell petrol pumps.

Deregulation of Petrol prices was on cards since past few years. So I guess this should not be a unexpected shock.

Shell somehow was sure of this and hence even if very few people visited their pumps they just held on to their prices. Even if their sales were pathetic they increased their number of outlets instead.

[rupinder]

car sales particularly petrol car sales will be hit .with increase in diesel prices the transport charges will increase so will the price of food

[Fordmanchau]

It's ok to free up the fuel prices from regulation, but then diesel has been only partially freed up.Actual increase was to be Rs. 3.80 per litres,but the government has capped it at Rs. 2. Petrol vehicle owners will rue the hike, but can't help it.
I feel, it's alright to deregulate the fuel prices, but then some rationalization in the taxes are for sure required. You can't keep milking the common man right, left and centre. 100% tax on the fuel prices is just too much.

[Dr.AD]

Pardon my ignorance, but what does deregularization exactly mean in layman's term? Or more precisely, how will this affect the end customers? Does this mean the Petrol prices in India will keep on fluctuating daily based on global oil prices (similar to what happens in US for example)? Also, does this mean we will see different fuel prices daily at pumps owned by different oil companies as they will be free to choose their own selling price?

I agree that particularly petrol car sales may be hit with this increase. But good news could be that some "over-priced" petrol cars may be forced to reduce their prices which may work out well in the end for everybody

Thanks,
-AD

[mjothi]

This is too much. Certainly a big issue. And govt. is going to face more burden with the ever increasing Diesel vehicle. This type of approach, will only make them spend more on Diesel subsidy irrespective of private or public transport.

Shock! Petrol, diesel, LPG, kerosene prices shoot up : Rediff.com Business
Announcing the hike in prices, oil secretary S Sundaresan said that the prices of petrol and diesel prices will be market-driven. He also said that the government had taken the decision as 'consumers can afford higher prices'.

What nonsense is this?

[sgiitk]

Was expected. Now we will be able to get better (read Reliance) petrol. It is rough but in the long run it will be cheaper than the so called subsidy. For every rupee of subsidy we probably end up shelling out Rs,5 in taxes!

I hope they increase kerosene by another Rs.10. See how the sales of kerosene will plummet and those of Diesel shoot up.

[Daewood]

He said even diesel prices will left to market forces soon.

[condor]

vnk77 : With taxes the effective hike would be almost Rs. 5 here in Bangalore, this will bring up the prices to Rs. 59+ just about same as what you get in Shell petrol pumps..

So the brighter side of this will be that we can go to Shell bunks just like any other. .

[n.devdath]

I somehow don't understand this petrol diesel thingy, some say that the Govt makes more money while crying out loud about these losses, the others say it is actually at loss. There is something more than what meets the eye.

[ACM]

Finally they bit the bullet.
Expected,
good in the long run,
they could have done it for Diesel as well - but for poiltical compulsions
Now we will some sort of political drama from the other parties,
Taxi and Autowalas have already placed a demand for a raise, this demand may increase futher
Should not have too much of an impact on inflation.
We may even see a drop in prices at times based on the world market, though in the long run a rise is inevitable - untill we have electric cars in the mainstream

[.sushilkumar]

i Guess, this Hike was completely uncalled for. despite loosing money ( as per govt ) oil companies are still showing profits on their Balance sheets, don,t know how???.

IMO, this will hit the inflation to a record high , it's already hovering around 17 % , now operators will go on strike demanding hike in fares and blackmailing the govt, anyways it's people like Us ( common man ) who suffers the Most , first via High taxes, than via daily chores, whose price has obviously gone up due to fuel price hike .

Although deregulating the price is good in long run but govt can do away with excise duty and other levies imposed, which constitutes about 30-40 % of a litre of fuel.

[holysmoke]

when does this take effect?

[vnk77]

Originally Posted by holysmoke

when does this take effect?

From midnight.

I just tanked up from the petrol pump next my office after hearing the news.