Hike in petrol prices, Govt justifies but people disagree

Wednesday seemed  too be a bad day for the common people as they were forced to pay more for the petrol. Though it was clear by Prime-minister Manmohan Singh that people may have to go threw some tough decisions   but no one was aware at what pace it will come, The new price for the petrol in Delhi NCR will be around R.s 73.

The rupee fell to a fresh record low on Thursday as a sharp increase iwn petrol prices failed to lift investor sentiment even as it fuelled expectations New Delhi might soon take the more politically fraught step of raising diesel prices. India’s hefty subsidy bill for diesel, kerosene and LPG is a budget-buster that forces heavy government borrowing and weighs on investor sentiment. High global energy prices and a declining rupee, meanwhile, exacerbate the current account deficit in a country that imports 80 per cent of its oil. Oil companies lose about 14 rupees ($0.25) per litre on diesel, which is much more widely used than petrol, and a weakened government has been unable to push through a price rise or allow full market pricing in the face of political opposition, including from within the ruling coalition.

Posted on May 24 2012. Filed under Economy. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry