Home»Money»News» Diesel & LPG Prices Decoded: Save Rs 1500, Lose Thousands!

Diesel & LPG prices decoded: Save Rs 1500, lose thousands!

  • Dailybhaskar.com
  • Jan 18, 2013, 12:20 PM IST
LPG, diesel price hike, fuel subsidy, petrol price decontrol
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LPG, diesel price hike, fuel subsidy, petrol price decontrol

New Delhi: The long delayed partial deregulation of diesel price has finally happened, resulting in a hike of 40-50 paise a litre per month for retail customers and nearly Rs 11 for bulk consumers. 
 
The government also raised the cap on subsidised LPG to nine cylinders per household from six.
 
What do these steps mean for the average consumer of diesel and LPG mean? How will it effect your household expenses? Here's a closer look at the math.
 
(Photo: Reuters, Getty Images) 

Find out more by clicking on the following slides

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On June 2010, the government first allowed OMCs to decide petrol price, with the stated purpose of helping the companies recover losses and rid the government from the financial burden of subsidies. But the actual hike in price- that of a steep Rs 5- came right after the January 2011 Assembly Elections in West Bengal and Tamil Nadu got over. However, no such hike came while the February 2012 UP elections were underway, despite the significant Rs 4 per litre loss being incurred by OMCs during that period.
 
Moreover, when petrol was first de-controlled, oil marketing companies said petrol prices will be fixed in line with fluctuation in international prices of crude oil.
 
However, even when price of crude went down, OMCs announced a hike in the price of the fuel, citing a weaker rupee (resulting in higher import prices) as the reason.
 
Since June 26, petrol price has been hiked 19 times and reduced a mere 7 times. The idea is to effect minor but frequent hikes so that public outcry against the hike remains relatively muted.

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