With elections over, UPA hikes Petrol price by Rs 5

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Abu Sheikh

15 May, 2011

Sources said that earlier the government had asked oil companies to refrain from increasing the price of petroleum products in view of the assembly elections in the four states, as this decision could have a negative fallback on the UPA.

WITH THE elections in four states across the country over, the UPA government on Saturday dished out a hefty hike in the price of petrol at Rs 5 per litre, which became effective from Saturday midnight.

This is not all, the government sources said it is most likely that diesel, kerosene and LPG prices would be hiked by a steep margin. This has been done to bring the domestic fuel prices in line with international crude price, which has shot up steeply since last couple of months.

It is expected that diesel with witness an increase of Rs 4 per litre, whereas the price of domestic LPG cylinders will be hiked by Rs 20-25.

With this hike coming into effect, the price of petrol in Delhi would be Rs 63.37 per litre, which earlier stood at Rs 58.37 for a litre. Despite the hike, petrol companies claim that they will still lose Rs 5.50 per litre and it is likely that they will call for another hike in the price of Petrol in the near future.

Bharat Petroleum has hiked the price of Petrol by Rs 4.99 per litre whereas HPCL has hiked it by Rs 5.01 per litre. The oil marketing companies had recently called on the Petroleum minister to discuss the price hike as they had been losing a lot of revenue due to high crude price.

However, with the polls over and UPA alliance doing fairly well in the state elections, the government it seems has decided to burden the people with high fuel prices, which will further boost the inflationary pressure.