The steep hike in petrol price has come as a shock to many. But how many among us are ready to cut consumption of fast depleting fossil fuels? DC tries to find out.

While the recent highest ever hike in price of petrol of Rs 7.50 has been called atrocious, the state government trying to soften the blow on the common man on Thursday by forgoing the sales tax revenue of Rs 1.63 is termed as too little compared to the hike.

But the onslaught is not over yet, as on Friday group of ministers will meet to consider price rise of diesel, LPG and kerosene.

Rise in petrol price cuts deep into the pocket of common man as over 90 per cent of the households own at least one vehicle with an average monthly fuel bill of Rs 2,000 and fuel price hike leads to overall inflation in prices of commodities due to rising cost of transportation.

Also this comes at time when there has been general rise in the prices of essential commodities.

Oil companies have been pressurising the union government to raise the price of fuel, claiming that the recent Assembly elections had made the Union government deny them the permission to raise petrol prices, keeping with the international price of crude.

To keep going in the days ahead, they have demanded another Rs 1.50 rise in petrol for the whole fiscal given the present rate of international crude price.

But experts point out that international crude prices have been falling.

Figures put out by the union government point to crude prices ruling at USD 106.95 a barrel when prices have been declining, with at an average $111.15 during the fortnight up to May 15 and $118.20 the fortnight before that.

As an affront to the people, the companies say that the loss per litre of diesel was around Rs 13 and for each domestic LPG cylinder Rs 480.

While more and more people are opting for diesel cars to take advantage of lower price of diesel, under recoveries, as claimed by oil companies, in diesel and LPG would demand dual pricing where non-farm use should have minimum subsidy.

It is argued that the steep increase in petrol price cannot help in resolving the ballooning fuel subsidy issue.

Petroleum dealers have been suggesting dual-pricing, with petrol at a lower price for the two wheelers while higher tax for luxury vehicles.

Younger generation is more for style and less economy conscious and parents dole out huge amounts to meet the growing demands of their children.

“My son, who is studying engineering, had been demanding a stylish bike that has mileage of only 25 km/hr. I got him the two-wheeler last month.

Now with petrol price shooting up I have no clue how to give him enough money to fill fuel. I have no option but to either sell the bike or lock it in our shed,” said Anto Joseph, a resident of Vyttila.

While shifting to public transport system is touted as an alternative, it will remain unrealistic unless such services are vastly improved in terms of reliability and quality.

Lack of bicycle bays discourages people from using to this mode of transport for short distances.

No transparency on fuel front, says panel member

When the standing committee on petroleum and natural gas met at April 4, the lone CPI(M) MP, Mr M.B. Rajesh, had written a note of dissent stating that the report uncritically accepted the concept of ‘under-recoveries’ by the oil marketing companies, though they were not actual.

He had pointed out that the companies have been reporting positive net profits and paying dividends to their shareholders.

IOC’s profit after tax stood at RS 7,445 crore in 2010-11. BPCL and HPCL also earned profits of over Rs 1,500 crore last year.

These under recoveries were calculated on the basis of import parity prices. There should be total transparency in the actual amount of per unit subsidy on each of the petro products provided by OMCs and how much of it was being provided and how much of it was being compensated.

These were inflated estimates and could not form the basis of sound policy-making, Mr Rajesh had stated in the note.

“I do not agree with the recommendations of the committee in its 8th Report on DFG (2011-12) in the matter of doing away with providing subsidized LPG cylinder to those having an annual income of more than Rs 6 lakh. I had also submitted note of dissent to the 8th Report in this regard,” he stated.

He also felt that subsidy should not be given for the diesel used to power towers by private telecom companies.

“The low cost of refining as compared to global costs should be taken into account in determining domestic prices of petroleum products, instead of linking the prices with that prevailing in the international markets,” he stated.

Petrol cost down by Rs1.63 per litre

The Cabinet on Thursday decided to forgo the additional sales tax on the hiked petrol price bringing down rates in the state by Rs 1.63 per litre.

The decision was taken at the special cabinet meeting held here. Chief Minister Oommen Chandy told media persons that the decision to forgo the additional tax on hike would cost the state exchequer Rs 218 crore.

He said he had written to the Prime Minister, UPA chairperson and petroleum minister about the hike.

Petrol prices across the state. Rates after Wednesday midnight hike given within brackets

Thiruvananthapuram 74.11 (75.74)
Kollam 74.27 (75.90)
Alappuzha 74 (75.63)
Pathanamthitta 74.16 (75.79)
Kottayam 73.99 (75.62)
Idukki 74.31 (75.94)
Ernakulam 73.85 (75.48)
Thrissur 74.08 (75.71)
Palakkad 74.27 (75.90)
Malappuram 74.30 (75.93)
Kozhikode 74.16 (75.79)
Wayanad 74.53 (76.16)
Kannur 74.04 (75.67)
Kasargod 74.31 (75.94)

How to beat the price hike

Use public transport

Try riding a bicycle for very short travel

Car pooling

Select fuel efficient vehicles

Dual pricing for fuel