Thursday, May 24, 2012

Petrol price up 7.54 to 73.18, sharpest hike ever


TIMES NEWS NETWORK 
New Delhi: By the time you read this, the price of petrol would have gone up by more than Rs 7.50 a litre across the country.  After adding state taxes, petrol will cost Rs 73.18 a litre in Delhi, Rs 78.57 in Mumbai, Rs 77.88 in Kolkata and Rs 77.53 a litre in Chennai. This marks an increase of around 10%.

Why oil marketers say price hike was unavoidable 

Every 1 drop in rupee’s value against dollar adds 8,000 crore import burden on oil marketers. Pre-hike pump prices corresponded to $109/barrel of petrol in regional bulk markets. The average price in the first fortnight of May was $124/barrel. 

Crude prices fell to a 7-month low near $91 a barrel on Wednesday. But this refers to Brent crude in Singapore, not Indian mix of imports.


Above is the extract from a daily news paper.  It is normally reported that any increase in petrol prices have over 50% of Government taxes. The tax component increase is not and should not be dependent on import price of crude oil or on rupee fall vis a vis dollor price i.e. on exchange rate.  The quantum of taxes is already fixed before any increase.  By such quantum increases, governments should not take undue benefits like this and make fool of people.  They should come out with actual facts behind all this and openly say that this is one of the very easy means of raising their revenues outside the budget processes.   The subsidies on diesel, LPG and more so on the Kerosene are being financed through increase in petrol prices only.  At the same time, poor people may not be getting all the benefits out of this as their most of the purchases have to be from the parallel economy which is very much existing and flourishing in India.  

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