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Updated: April 17, 2012 23:44 IST

RBI seeks fuel price hike

Sujay Mehdudia
Comment (10)   ·   print   ·   T  T  
Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank of India on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages. A scene at a petrol bunk in Hyderabad. File photo
The Hindu
Making a case for raising prices of diesel, kerosene and LPG, the Reserve Bank of India on Tuesday said hike in rates of petroleum products is necessary to arrest fiscal slippages. A scene at a petrol bunk in Hyderabad. File photo

Reserve Bank of India (RBI) on Tuesday batted for an increase in the prices of diesel, kerosene and domestic LPG to arrest fiscal slippages.

“Overall, from the perspective of vulnerabilities emerging from the fiscal and current account deficits, it is imperative for macroeconomic stability that administered prices of petroleum products be increased to reflect their true costs of production,” RBI Governor D. Subbarao said in the Annual Monetary Policy statement for 2012-13.

While petrol prices are market-linked, the government fixes the rates of LPG, kerosene and diesel, and this results in a large budgetary expenditure on account of subsidies.

The RBI warned that the budget estimate of oil subsidy was likely to fall significantly short of the required amount. High subsidies are putting pressure on the fiscal deficit, which touched 5.9 per cent of the GDP last fiscal, and is pegged at 5.1 per cent during 2012-13. India imports 80 per cent of its crude oil requirements.

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Subba Rao ride free car from Govt in our money. He knows it very well
how Govt both central and state are cheating common man in the name of
sales tax, excise, vat etc on fuel cost. Today each liter petrol taxes
are 40/- to 45/- means Petrol cost price is about 40/- with profit for
oil companies. But we are buying at 74/- per liter and oil companies
telling they are loosing and Govt looting with huge taxes. Cong.
remember this is the last time.

from:  Dhiraj
Posted on: Apr 20, 2012 at 16:57 IST

Increasing petroleum price will attract people criticism ,Common man
should be focus of govt. 's policies, one side we are talking of
financial and social inclusion on other side by increasing petroleum
prices which is associated with primary services and needs, we are
excluding them (poor people) to avail services and goods.

from:  Nitish kumar
Posted on: Apr 18, 2012 at 10:41 IST

Reduced the intrest rate next day increase petrol prices ...Then inflation will increase !! Again increase intrest rate !! again fuel prices !!! We have been tolerating this for past few years !!! Dear Government do once thing !!! Seperate the rich and poor !!! Nuke the poor one so that you could avoid various burdens for you like subsidies,free water ,free electricity etc..Rule with the people like Vijay malliya and Ambani's ...You simply dont care about a middle calass or BPL class person!!!Come on ..we will show you places where people struggle for food water and shelter.Actually where this money is going which are supposed to reach masses??

from:  Arun
Posted on: Apr 17, 2012 at 20:06 IST

Why dont you people think blending ethanol to petrol. We can blend
atleast 5% rite. Why no one is talking this topic.

from:  nattuthurai
Posted on: Apr 17, 2012 at 19:56 IST

removing subsidies is fine.middlemen make a margin the common man has to pay MRP for all items.added to that is the unwritten unhidden cost===delivery charge for all essentials on a 'if you want it better pay me what i ask' basis.this holds good for LPG,milk and even newspaper.will i ever see fairness during my lifetime.

from:  revathi s
Posted on: Apr 17, 2012 at 19:54 IST

How about reducing unfair taxes on petrol and perhaps even removing it, and then removing the subsidies on other products like diesel and LPG? I'm sure the rich people driving diesel SUVs won't mind, and two wheeler users will bless the government.

from:  B S Kumar
Posted on: Apr 17, 2012 at 17:37 IST

RBI should be told to Govt side-afffect of price increase : Margin of
defeat also increase in every election.

Posted on: Apr 17, 2012 at 17:33 IST

A further hike of petrol prices would be more pressure on spending
power and stoke more inflation. Why does the government never bother to promote alternative fuels to petrol. The government owns the major oil retailing companies and they are the monopolies in fact. The Indian government promotes only petrol and does little to help switch over to CNG. Which is a cheaper and more environmentally friendly also. The general population is left with no choice. Then there is no transparency in the governments marketing of petrol. Since their nationalization we have only heard of loss, loss and loss. And we are
still buying petrol at prices much more than in USA. Even then those US Oil companies are raking in record profits. And India gets to buy crude oil at more favourable terms from friendly Gulf countries. There has to be an investigation into all this.

from:  Malcolm
Posted on: Apr 17, 2012 at 16:55 IST

James Lamont has written a good article in the FT today on how subsidies
that cost around 9% of GDP are draining the Indian economy. We subsidize
oil prices, electricity for farmers, rural employment. It is better to
eliminate all such subsidies and focus on building infrastructure in
India that will serve long term growth.

from:  James Gurung
Posted on: Apr 17, 2012 at 16:13 IST

Please do not try to increase the price of all the items and control the inflation.Increase the production especially of vegetables,rice,wheat etc. ask wholesalers to give it with less profit margin now for 1kg tomato which is purchased from farmers at 2 or 3 Rupees are selling at 25 to 35 Rupees if they cut there profit margin and able to sell the same between 10 to 15 rupees per KG like that for all items needed by a common man to leave all the things will come on the right track.Simply increasing the price will help only politicians and big business tycoons not common man.Thanks

from:  Shine JOse
Posted on: Apr 17, 2012 at 15:53 IST
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