Diesel, Kerosene, LPG Prices Hiked

Fuel prices in India have been hiked yet again.

The price of diesel has been increased by Rs. 3 per litre, that of LPG by Rs. 50 per cylinder, and kerosene by Rs. 2 per litre. The hike is effective from midnight. This hike is exclusive of VAT (Value-Added Tax).

In Andhra Pradesh, LPG will now cost over Rs. 400, and diesel Rs. 45.

An Empowered Group of Ministers (EGoM), led by Finance Minister Pranab Mukherjee, sanctioned the new prices. Petroleum & Natural Gas Minister Jaipal Reddy, announced the prices, terming the price hike as "moderate".

"Diesel, without this increase, was to cause a loss of Rs. 1 lakh crore. Even now only Rs. 1500 crore will be covered," said Jaipal Reddy.

The new prices are meant to bail out state-owned oil firms, which currently lose Rs. 15 per litre on diesel, Rs. 27 per litre on kerosene and Rs. 381 per gas cylinder, because prices of fuel are below market rates. Oil Marketing Companies (OMCs) will now be able to reduce their under recoveries - which stood at Rs. 1,71,140 crores - by Rs. 21,000 crore.

Jaipal Reddy responded to criticism over the price hike by saying that the last time the diesel price was hiked was in June 2010.

Meanwhile, Mamata Banerjee has said she does not support the price rise, saying that the Trinamool Congress is "with the people".

Back home, TDP leader Yerram Naidu has remarked that the government is only interested in filling up its coffers and not in solving the common man's problems.