The government on Wednesday hiked the price of petrol by Rs 4 and that of diesel by Rs 2 a litre. However, the prices of LPG and kerosene were left unchanged. Vegetables and food items will also be dearer. There had been talks of fuel price hike for a long time. Some felt that it was to persuade the finance ministry to reduce tax on fuel.
 

With the international crude prices increasing to a seven-month high of $73 and the finance ministry anxious about growing fiscal deficit, the government has taken the step finally. Truckers and transporters threatened to hike freight rates. Taxis and buses fares in Mumbai and Delhi will not be hiked as CNG prices are unchanged.

This is the first fuel hike in a year. Petrol and diesel prices were last increased by Rs 5 and Rs 3, respectively in June 2008. Later, petrol price was reduced to Rs 10 and diesel price was reduced to Rs 4 in two equal instalments. The present price hike decision was taken without consulting the Cabinet or the Cabinet Committee on Political Affairs. Murali Deora, Oil Minister, announced the decision after running it past Manmohan Singh.

Deora said that the hike has been necessitated because of rising international crude oil prices, which have doubled to $70 a barrel since December. The state-run marketers are losing around Rs 93 on each gas cylinder and Rs 15 on one litre of kerosene. The government will take in a loss of Rs 30,000 crore on kitchen fuels.