Viewing the general election nearer, the UPA government on Wednesday announced another cut in transportation fuel and cooking gas prices. A slash of Rs. 5 a litre for petrol, Rs. 2 for diesel, along with a reduction of Rs. 25 for LPG domestic cylinder have come into effect from Wednesday midnight.
This is the second and most probably final round of cut before the Lok Sabha election in less than two months. Earlier the Centre on December 05, 2008 had brought a fuel rate cuts by Rs. 5 and Rs. 2 per litre for petrol and diesel respectively, while LPG price was kept unchanged.
The decision to revise the fuel prices was taken by the Cabinet Committee on Political Affairs (CCPA) headed by External Affairs Minister Pranab Mukherjee after a four-hour meeting.
‘The committee has taken a number of important decisions that would be conveyed later, but let me tell you that we have decided to cut the prices of petrol by Rs.5 per litre, diesel by Rs.2 per litre and LPG by Rs.25 per cylinder,’ Mukherjee, who is now acting as the finance minister, told reporters after the meet.
Petroleum Minister Murli Deora on this decision said, “We have decided to pass on benefits of the softening international crude oil prices to the consumers.” While Railway Minister Lalu Prasad Yadav commented, “We want to give relief to housewives.”
Earlier, the opposition as well as coalition parties was mounting huge pressure on the government to reduce the prices on transportation fuels and cooking gas as the crude oil prices in the international market had been slipped from over $140 per barrel July to below $37 a barrel in December last, but government was arguing that the Oil Marketing Companies (OMCs) that had born huge revenue loss of Rs.1,06,000-crore in April to December should get chance to recover their losses partially.
Moreover, the government was also arguing that the depreciation in the Indian currency that has weaken from an average of Rs.39 to Rs.50 a dollar was eroding the gains of crude oil prices; thus it was not feasible to pass the benefits of lower crude oil prices.
However, UPA government in December last year had announced to make another round of cut in 2009 if the prices of crude oil in international market remain low.
Pranab Mukherjee also stated that CCPA has not decided yet to fulfill the demand of Finance Ministry that was asking to impose Re. 1 duty on each litre of petrol and diesel and restore the import duty of 2.5% that was scrapped last year to heal the soaring prices of fuels.
However, Mukherjee did not say anything whether government would accept Ministry’s demand in near future or not.
The new cost of petrol, diesel and LPG cylinder in Delhi are Rs. 40.62 a litre, Rs 30.86 a litre and Rs 279.70 per cylinder respectively, while in Mumbai the revised prices are Rs 44.55, Rs 34.45 and Rs. 312 for the same.
With the latest cut, the price changes in Kolkata are now at Rs 44.25 for petrol, Rs 33.21 for diesel and Rs. 327.05 for diesel. In Chennai petrol will cost Rs 44.25, diesel Rs 32.82 and LPG Rs 314.55.
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