Petrol will cost Rs3.73 per litre more, diesel price has been increased by Rs2 per litre, kerosene is dearer by Rs3 a litre and cooking gas price has gone up by Rs35 per cylinder
Petrol will cost Rs3.73 per litre more, diesel price will increase by Rs2 per litre, kerosene will be dearer by Rs3 a litre and households will have to pay an additional Rs35 per cylinder of cooking gas from today, reports PTI.
In a major decision to bring petroleum products in line with market rates, the government today freed petrol from all pricing controls and hiked diesel prices by Rs2 a litre, oil secretary S Sundareshan announced after the meeting of the Empowered Group of Ministers (EGoM).
Even diesel prices will be eventually freed of all administrative controls, Mr Sundareshan said.
The decisions, taken by the EGoM headed by finance minister Pranab Mukherjee, were timed appropriately to take advantage of relatively lower global crude prices, which are hovering around $77 a barrel.
Besides, this would also help cut down on the government's huge subsidy bills, as also relieve the oil marketing public sector undertakings (PSUs) of staggering burden on account of selling these fuels much below the market prices.
Mr Sundareshan said that the government would, however, continue to "heavily subsidise" the cooking fuels.
Oil minister Murli Deora had, on more than one occasion, briefed the prime minister Manmohan Singh and Mr Mukherjee on the crisis that would befall oil PSUs if no decision was taken on hiking prices.
The decision would cause core inflation, already in double digits, to shoot up further.
In May, WPI-based inflation provisionally entered double digits at 10.16%.
State oil firms currently lose about Rs215 crore per day on selling fuel below the imported cost. At present, petrol is being sold at Rs3.73 a litre below its cost, diesel at a loss of Rs3.80 per litre, kerosene at Rs18.82 a litre and domestic liquefied petroleum gas (LPG) at a discount of Rs261.90 on every 14.2 kg cylinder.