Indian Govt. to take Fuel Price RISE decision soon..!

With the price of oil skyrocketing Indian consumers are waiting anxiously for their governments' decision on raising petrol prices. After pressure from the left, second round of cabinet talks are planned with a decision expected soon. India's Petroleum Ministry on Friday said a domestic fuel price hike was "inevitable" to bail out state oil firms that sell fuel at hugely discounted rates and are reeling from surging global prices.

A "price hike is inevitable," Petroleum Secretary M.S. Srinivasan said, but added the "specific quantity of the price increase" was still being worked out. The Press Trust of India reported without naming sources that the petroleum ministry was seeking a 10-rupee-a-litre increase in Petrol prices and a 5-rupee-a-litre hike in Diesel prices. Based on current pump prices in New Delhi, this would represent a 22 percent increase for Petrol and 16 percent on Diesel.

State-owned refiners have been reporting combined revenue losses of 105 million dollars a day as international prices have surged. The government sets the massively discounted prices at which fuels are sold to shield the country's poverty-hit masses from high fuel costs and to help contain inflation.

The ministry was proposing a combination of price hikes and duty cuts to reduce the revenue shortfalls suffered by state-owned refiners from sales of petrol, diesel, liquid petroleum gas and kerosene.

But the Congress-led government which faces general elections within a year, is fearful any fuel rise could trigger a backlash from voters already reeling from high overall inflation running at 7.82 percent, far above the central bank's target of 5.5 percent.

In February this year, India hiked gasoline and diesel prices for the first time in 20 months.

Keywords: Indian Petroleum Ministry, Petroleum, Petrol, Diesel, Indian Economy