Price of diesel hiked by Rs 5, subsidized LPG restricted to 6 cylinders a year

Discussion in 'Economy & Infrastructure' started by VIP, Sep 13, 2012.

  1. VIP

    VIP Ultra Nationalist Senior Member

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    NEW DELHI: Biting the bullet, the government today hiked diesel prices by a steep Rs 5.62 per litre and restricted the supply of subsidized cooking gas to 6 cylinders per household in a year to fetch an additional Rs 20,300 crore. It, however, left kerosene rates untouched and spared an increase in petrol price by cutting excise duty by Rs 5.50 per litre.

    Reeling under the criticism of a policy paralysis and facing an urgent need to cut down the ballooning oil subsidy of Rs 187,127 crore, the cabinet committee on political affairs chaired by Prime Minister Manmohan Singh took the decisions which have come under strong attack from allies like TMC and SP.

    TMC and DMK ministers kept away from the meeting. The biggest-ever hike of Rs 5 hike in diesel prices excluding VAT or local sales tax will make the commodity sell at Rs 46.95 per litre from tomorrow in the national capital as against Rs 41.32 a litre currently. The CCPA decided that each household will get 6 cylinders of 14.2-kg per annum at the subsidized rate of Rs 399 and any requirement beyond that would have to be procured at the market rate of Rs 746 per bottle.

    Diesel prices were last hiked by Rs 3.37 per litre in June last year. State-owned oil firms were losing about Rs 6 per litre on petrol, a commodity which was deregulated in June 2010 but rates of which have rarely moved in tandem with cost.

    Even after the hike and restrictions on LPG, the government will be left with an under-recovery of Rs 167,000 crore this fiscal which is more than Rs 138,541 crore of 2011-12. The decisions to increase price of diesel and capping of LPG cylinders were taken in the backdrop of projected massive under-recoveries of Rs 1.87 lakh crore for the current fiscal on account of high international crude oil prices and sharp depreciation of rupee against US dollar.

    As regards petrol, the release said, "No increase in the price of Petrol, although the current under-recovery on petrol is about Rs 6 per litre. The consequent loss to the oil marketing companies will be offset through reduction in excise duty on petrol by Rs 5.30 per litre."

    The capping of subsidized LPG cylinder to six in a year, it said, will help in reducing the under-recovery by about Rs 5,300 crore for the remaining part of the financial year.

    However, it added that the under-recovery on sale of LPG during 2012-13, even after the cap, is estimated to be above Rs 32,000 crore.

    The release further said that PDS kerosene, which is being sold at Rs 14.83 per litre (at Delhi), will result in under-recovery of Rs 32,000 crore in the current fiscal.

    The parliamentary standing committee on petroleum & natural gas had earlier suggested capping of subsidized LPG cylinders to 6 per annum.

    The capping supply of subsidized LPG cylinders at six per annum, it added, "will lead to saving of subsidy on one third of the total LPG cylinders. Two third of the total cylinders will still be supplied at subsidized rate".

    About 44 per cent of the total LPG users, who consume six or less cylinders per annum, will not be affected by the government's decision. Capping of cylinders, it added, "will also lead to reduction in misuse/diversion of subsidized cylinders".

    The decisions, the release added, will still leave an under-recovery of about Rs 1.67 lakh crore in the current fiscal, up from Rs 1.38 lakh crore in the previous fiscal.

    Price of diesel hiked by Rs 5, subsidized LPG restricted to 6 cylinders a year per family - The Times of India
     
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  3. VIP

    VIP Ultra Nationalist Senior Member

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    Oh lord, now everything will be costlier. And the 750/gas cylinder price is really backbone breaking. Thank God that we're having PNG pipeline connection here.
     
  4. sob

    sob Moderator Moderator

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    My 2 cents, price roll back will be there between Rs. 2 to 3 depending on the protest within the Congress.

    Regarding the cap on the number of cylinders, is it also applicable for the ministers. Remember a few months back it was found that some ministers/MPs were consuming almost a cylinder a day, and that too the domestic cylinders, not the commercial ones.
     
  5. sob

    sob Moderator Moderator

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    However this is indeed a good job by the Government and they should stick to it. With this the danger of the lowering of the credit rating has been pushed back.
     
  6. blank_quest

    blank_quest Senior Member Senior Member

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    wonderful ! Hats off . what a creative solution. :thumb:
     
  7. Ray

    Ray The Chairman Defence Professionals Moderator

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    I was amazed that Mohan Guruswamy in the TimesNow debate felt that the Middle Class is not the Aam Admi!

    He was of the opinion that cooking gas was not used by the poor.

    My maid (heard that they are called 'housekeeper' on another channel debating on women being 'domestic engineer' requiring a pay from the husband) uses gas. Chulas are not allowed within city premises.

    Now, is my maid/housekeeper middle class?

    Your opinion Mohan Guruswamy.

    These economists are what is called the bai khata types. Totally divorced of reality and enamoured by figures.

    If the freebies in coal block and 2 G allotments were not given and instead auctions were done, would the Govt be in the dire straits they are in where they have to balance the book by extorting money from the middle class taxpapers time in and time again, just because they cannot protest?

    Either damned idiots are in Govt or the clients of the corporates or plain crooks.
     
  8. Ray

    Ray The Chairman Defence Professionals Moderator

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    It would be a different matter is they paid for the same.

    They have enough avenues to ensure that their nest is protected.

    You have to pay for everything that you buy and also what the Ministers and MPs buy through your taxes.

    They hike their pay and perks regularly and then make you pay for their daily living to include their holidays around the world as study tours and it is universal including MPs and not confined to any MLA from a State.
     
  9. Blackwater

    Blackwater Veteran Member Veteran Member

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    congrats to all fellow indians:rofl::rofl::rofl::rofl::rofl:
     
    Last edited: Sep 14, 2012
  10. blank_quest

    blank_quest Senior Member Senior Member

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    Indian responding == [​IMG]
     
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  11. VIP

    VIP Ultra Nationalist Senior Member

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    Congress shamelessly saying that as a party they oppose this price hike. Sabke mathe par Rahul Gandhi likha hai kya....:angry:


     
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  12. sob

    sob Moderator Moderator

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    The markets have responded to the price hike by going up nearly 400 points.

    What makes economic sense never makes common sense.
     
  13. Ankit Purohit

    Ankit Purohit Senior Member Senior Member

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    Bye Bye Congress
     
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  14. VIP

    VIP Ultra Nationalist Senior Member

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That's why I always hated economics. :p
     
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  15. sob

    sob Moderator Moderator

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    Now the important step for the Central Government is to call for a meeting of the Finance Ministers of all the states and ask them to rationalise the duty structure for Petroleum Products and LPG Cylinders.

    A very large chunk of the final price of these products goes to the state governments as taxes, while all the blame for the high prices goes to the Central Government. With every price increase the booty of the state government also increases. Privately all the state governments look forward to increase in the prices, but publicly their reactions are always to the contrary.
     
  16. Blackwater

    Blackwater Veteran Member Veteran Member

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    even BJP will do the same. you must understand economic logic behind it
     
  17. Blackwater

    Blackwater Veteran Member Veteran Member

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    Another bad luck of India is , we don''t have papa like Saudis.:lol::lol::lol::lol:
     
  18. arya

    arya Senior Member Senior Member

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    well thats really cool

    but disel, petrol ,gas price should be raised only for high class
     
  19. Ankit Purohit

    Ankit Purohit Senior Member Senior Member

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    economic logic ?????????

    ke phir khud ki jeb bharo
     
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  20. Blackwater

    Blackwater Veteran Member Veteran Member

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    :lol::lol::lol::lol:

    that is also part of it:lol::lol:
     
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  21. hit&run

    hit&run Elite Member Elite Member

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    Good job but it should be equal to international price with no quotas and uninterrupted supplies. People in India should stop working cheap things will be normal.
     
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