Public sector oil companies will raise petrol price by Rs 2.50 a litre and diesel by Rs 2.0 from Monday night, even as kerosene and LPG prices remain unchanged.
Petroleum Minister Mani Shankar Aiyar said Cabinet decision was based on the principle of "equitable burden sharing by government, consumers and oil companies."
It was necessary to raise diesel prices by Rs 5.13 per litre and petrol by Rs 4.68 a litre due to surge in world oil prices and tax changes announced in the Budget.
The hike in excise duty on petrol and diesel and increase in road cess necessitated a Rs 2.20 per litre hike in petrol and Rs 1.06 a litre rise in diesel prices. Additionally, the cost of supplying cleaner fuel from April 1 came to Rs 0.30 per litre for petrol and Rs 0.24 a litre for diesel.
The remainder of the over Rs 4.50 a litre hike in petrol and more than Rs 5 per litre increase in diesel prices was warranted due to crude oil becoming dearer.
Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and IBP, who are together losing Rs 72 crore (Rs 720 million) per day due to non-revision in petrol, diesel, LPG and kerosene prices, made a cash loss of Rs 1,424 crore (Rs 14.24 billion) in March and April.
However, the Left parties -- CPI(M), CPI, RSP and Forward Bloc -- had opposed the hike saying that it would hit the people hard.
CPI(M) Politburo member Sitaram Yechury had said the issue of fuel price hike did not figure at the UPA Left coordination committee meeting on Sunday.
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