New Delhi: The nation saw a severe hike in petrol prices on Wednesday, May 23. The prices went up by Rs. 7.50 per litre.
The state run Indian Oil Corporation increased the prices by Rs. 6.28 per litre excluding taxes saying that, "Given the losses being incurred, the company is compelled to increase the price of MS by Rs.6.28 per litre (excluding VAT / Sales Tax) w.e.f. mid-night of 23/ 24.05.12.
This excludes losses already suffered till date during current financial year, i.e., 2012-13, which would require an additional increase of around Rs 1.50/ litre in selling price of MS for balance part of the year.
The above increase of Rs.6.28 per litre is exclusive of Sales Tax / VAT. Given that the rate of Sales Tax / VAT varies from 15% to 33% in the states, additional sales tax of Rs.0.94 to Rs 2.07 per litre shall be added to the aforesaid increase.
This shall be over and above the existing Sales Tax of Rs.10.30 per litre to Rs.18.74 per litre already being levied in the existing MS price. Since last price change international oil prices have increased and USD-INR exchange rate has shown further deterioration.
While Indian basket of crude has increased by 3.5% from $109.23/bbl to $113.08/bbl, international MS price has gone up by 14.5% from $108.62/bbl to $124.42/bbl. USD-INR exchange rate has deteriorated 3.2% from Rs 51.50/$ to Rs 53.17/$."
This increase in petrol prices has been met by some severe reaction from the public with political satire cartoon doing the rounds on social networking sites like Facebook and twitter. The people are demanding an answer from the ruling UPA government, in the hopes of finding a solution to their troubles.
Along with the general public, India's main opposition Bharatiya Janata Party (BJP) critcised the Congress-led United Progressive Alliance (UPA) government and demanded for a rollback.
BJP leader Narendra Modi gave his opinion on the issue by saying that, "The way petrol prices has been increased, it clearly highlights the inefficiency of the Delhi (central) government. People are angry. I hope Prime Minister understands the situation of the country seriously. He had promised to reduce price rise.”
Congress spokesman Manoj Tiwari on the other hand said that “The government will find a solution to the issue.” He added by saying that they are aware of the troubles being faced by the common man and has urged the UPA government to rollback the price of petrol by at least Rs. 3 per litre. The party also asked the government to not to rise the price of diesel.
The recent reaction to this price hike has been the Delhi government's Budget in which chief minister Sheila Dixit has stated that petrol will cost Rs. 71.92 per litre instead of Rs. 73.18 per litre. She said this change will come into effect once the budget has been approved by the Delhi government.
Although proposing a decrease in petrol prices, this budget has proposed an increase in CNG prices which will go up from Rs. 35.45 by Rs. 1.77 per kilo. This has cause discontent amongst taxi and auto rickshaw operators union in Delhi with them going on a strike on the 31st of May.
They are demanding either a rollback in CNG prices or an increase in auto rickshaw and taxi fares.
Sheila Dixit however has said in the budget's defence that, “We have continuously forgone VAT on CNG... UP and Haryana are already levying 12.5% and 5% VAT, respectively.”