Petrol? Squeeze last drop of blood Steepest hike of Rs 7.85

New Delhi, May 23: Petrol prices have been jacked up by nearly Rs 8 a litre, the steepest-yet hike that sought to squeeze the last drop from a fast-shrinking captive group in the name of the falling rupee. Oil firms are expected to decide and announce the price on their own but they conveniently waited till the budget session got over yesterday and activated the hike from this midnight. The companies have slapped a hike of Rs 6.28 a litre. The price consumers pay is still higher because of the taxes governments — both at the Centre and in the states — charge. Petrol buyers — other than private car owners and two-wheeler riders, not many vote-banks fall in that endangered category — will have to pay Rs 77.88 for a litre in Calcutta. It translates into an increase of Rs 7.85 for every litre. Diesel, favoured by those who can afford SUVs and other gas-guzzlers, will continue to be sold at Rs 43.74 or Rs 34.14 less than the price of petrol. This means the petrol bill for a Calcuttan has ballooned by Rs 22.56 a litre since June 2010 when prices were deregulated — a fashionable and responsible word that applies only to petrol buyers. This is the “responsible tax” the petrol consumer has had to pay for not switching to diesel vehicles and not living off subsidy meant for the poor. Sources said the oil industry had suggested changes in duty structure to reduce the impact of the price rise but the government, given the state of its finances, did not favour a cut. An increase was on the cards with the rupee continuing its free fall against the dollar but the size of the bite was large even by the petrol-milking standards. The record hike till now was Rs 5. Oil firms said they had to increase the petrol prices because of the “combined effect of changes in global gasoline prices and the depreciation of the rupee”. The oil companies are supposed to revise the price on the basis of the fortnightly average of international gasoline prices but had not done so for some six months, possibly because of several Assembly elections earlier this year. Then came the Union budget, for the passage of which the government needed allies. Partners such as Mamata Banerjee and M. Karunanidhi today demanded a rollback but stopped short of pulling out. Although many parties complained of the “cascading effect” of petrol prices, it does not account for much in the wholesale price index. Petrol has 1.09 per cent weightage on the index while diesel had 4.67 per cent.(TT)