Kerala to ease Rs 7 petrol price hike

[1]

In one of the biggest ever price hikes, oil companies raised petrol price on Wednesday by Rs 6.28 per litre, excluding local taxes.

Since the sales tax rates or VAT varied from 15 per cent to 33 per cent from state to state, there would be a increase between Rs 0.94 and Rs 2.07 per litre will be added to the price hike.

While oil companies were yet to release the updated figures for the different cities, the price in the state would be in the Rs 74 to Rs 75.88 range.

In protest, the Left Democratic Front and the Bharatiya Janata Party has called a 12-hour hartal from 6 am on Thursday across the state. All examinations to be held on Thursday have been postponed.

But as a token of relief, the chief minister Oommen Chandy said that the state would forego the increase in the sales tax which would mean a loss of more than Rs200 crore to the state exchequer. He also expressed his unhappiness over the price hike.

Indian Oil Corporation said that the loss suffered in the current financial year by it, would require an additional increase of around Rs 1.50 per litre.

With oil companies demanding increase in diesel price too, there is speculation that the group of ministers is to meet in Delhi on Friday to consider price rise of diesel, LPG and kerosene.

Oil companies claim that they were losing around Rs 13 per litre of diesel and Rs 480 per domestic LPG cylinder.

IOC said it had suffered a loss of Rs 2,108 crore and industry Rs 4,651 crore since the last price change," said IOC.

Incidentally, crude prices were around $106.95 a barrel against an average $111.15 during the fortnight up to May 15 and $118.20 the fortnight before that.

The present price hike may not have an impact on inflation as diesel is the main transportation fuel, there is bound to be a severe dent in household budgets in the state, especially with most of them having at least a motorcycle.

After the deregulation of petrol in 2010, petrol prices have been hiked several times and in 2011-12, petrol prices were revised five times to bring domestic prices in line with prices in the international market, but only marginal downward revision twice. The last hike was on November 4.