New Delhi: By the time you read this, the price of petrol would have gone up by more than Rs 7.50 a litre across the country. The increase, the steepest-ever, came a day after Parliament’s Budget session ended and PM Manmohan Singh talked about the need for “difficult decisions”. After adding state taxes, petrol will cost Rs 73.18 a litre in Delhi, Rs 78.57 in Mumbai, Rs 77.88 in Kolkata and Rs 77.53 a litre in Chennai. This marks an increase of around 10% and puts a squeeze of about Rs 6,000 a year on a family that spends an average of Rs 5,000 per month on petrol.

The UPA government took a bold step on the first day after its third anniversary by allowing state-run oil marketing companies to raise ex-refinery prices of petrol by a whopping Rs 6.28 per litre, the highest so far. With excise, duty and state levies, this translates to a Rs 7.5-Rs 8 (just over 10%) hike per litre.

Rates of diesel, LPG and kerosene left untouched

The UPA-II, celebrating three years in office, gave the “common man” a gift on Wednesday: the steepest- ever increase of Rs. 7.54 in petrol prices. The increase is the first in the past six months. Petrol price in Delhi was increased by Rs. 7.54 a litre to Rs. 73.18 with effect from midnight Wednesday, the state-owned oil marketing companies said in separate, but identical, statements.

India on Wednesday signed the gas sale purchase agreement (GSPA) for the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline, which upon completion would diversify its gas basket. With domestic gas output stagnating, the $7.6-billion Tapi gas project provides a ray of hope.

In five years, the country would have access to imported natural gas, in addition to imported liquefied natural gas and domestic sources, including coal bed methane gas.

With rupee depreciation leading to jump in oil import bill, petroleum minister S. Jaipal Reddy on Tuesday said there is an immediate need to raise fuel prices, but refused to say when the hike will actually take place.

“It (price increase) is very essential but (before hiking rates) we have to talk to political parties,” he told reporters here on way to Ashgabat for signing of the agreement for the Turkmenistan-Afghanistan-Pakistan-India pipeline.

The finance ministry will release Rs 38,500 crore from the budget for cash-strapped state-run oil marketing companies (OMCs). Also, the Department of Expenditure has directed state-run upstream firms ONGC, Oil India and GAIL India to shell out an additional Rs 1,640 crore — over the Rs 53,360 crore indicated earlier — as their share of the subsidy burden.

The Indian government is driving the country on the road to fiscal perdition. It missed its target of fiscal deficit by a mile in the last budget. It has transparently under-provided for fuel subsidies in the budget for 2012-13, suggesting that it plans to reduce those subsidies with active measures. However, in its desire to cling to power, its pusillanimity in political confrontation with its allies, and its fear that the opposition will oppose what it would itself do if it were in power, it is frozen into inaction in increasing diesel prices.

EGoM fixed the price for 5 years and it needs to decide on RIL’s revision demand, says Vahanvati

The government’s top law officer has said deciding on revising the price of gas from the D6 field of the Krishna-Godavari (KG-D6) basin before April 2014 is a matter of policy, not law. In his advice to Finance Minister Pranab Mukherjee, who chairs the empowered group of ministers (EGoM) on the subject, Attorney General G E Vahanvati has said one cannot ignore the fact that the price has been fixed and the fixation is effective up to April 2014.

New Delhi: India will buy gas from Turkmenistan at a price indexed to fuel oil, a cheap byproduct of oil refining, instead of crude that makes imports costlier than domestic supplies. The Cabinet on Thursday approved the model agreement for buying the Turkman gas that would be wheeled across Afghanistan and Pakistan through a $7.6-billion pipeline. Oil minister S Jaipal Reddy would join his counterparts from the participating countries to witness the signing of the gas sale purchase agreement in Turkman capital Ashgabat on May 23 and 24.

The Petroleum Ministry has sought cash subsidy of Rs.49,872 crore from the Finance Ministry to compensate state-owned oil companies for selling fuel at government-controlled rates in the January-March quarter.

Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation together lost Rs.1.48 lakh crore on selling diesel, domestic LPG and kerosene at rates lower than cost in 2011-12, an Oil Ministry official said here.