Petrol, diesel prices go up from Friday midnight

New Delhi: Petrol price will increase by Rs 2.71 a litre and diesel by Rs 2.55 per litre from midnight tonight after Finance Minister Pranab Mukherjee raised customs and excise duties on the two auto fuels in the budget.

Petrol price in Delhi will go up from Rs 44.72 to Rs 47.43 a litre and diesel to Rs 35.47 a litre, as indirect tax proposals moved in the budget come into effect immediately.

This followed customs duty on petrol and diesel being hiked to 7.5 percent from 2.5 percent and excise duty being raised by Rs 1 a litre to Rs 14.35 and Rs 4.60 per litre on non-branded (normal) petrol and diesel respectively.

"Oil marketing companies are not in a position to absorb these (incidence of increased taxation) and are passing them on to consumers, resulting in increase in petrol and diesel price," Petroleum Secretary S Sundareshan told reporters in New Delhi.

The entire Opposition walked out of Lok Sabha when the Finance Minister announced the hike in taxation terming it as anti-people and a measure that will fuel inflation.

Mukherjee also imposed 5 percent import duty on crude (currently nil), a move that would increase the input cost of refiners like Reliance Industries and Essar Oil.

The rate hike virtually put the Kirit Parikh report on fuel pricing reforms in cold storage as implementing its recommendation of freeing petrol and diesel prices would mean a further Rs 4.94 a litre increase in petrol and Rs 3.20 per litre hike in diesel rates.

"Only the price of the fuel is increasing, not our commission. The price hike will burden the common people who is already fed up with escalating food prices," FAMPEDA core committee member Girish Kamdar said.

Both the leaders alleged that the Government of Maharashtra is planning to increase the Value Added Tax (VAT) by one percent, which will see heavy resistance from the Federation.

"If the State Government further increases VAT by one per cent, outlets in border areas and highways will see a sharp decrease in business as transporters will depend upon neighbouring states for fuel," Lodh said.

"Our Federation will then call for a state-wide strike," he said.