The prices of Petrol increased by Rs 4.20 with effect from 2nd July 09

The Indian government has hiked the price of Petrol and diesel by Rs. 4.20 and Rs. 2.11 respectively (Kolkata Price) with effect from 2nd July 2009.

The Telegraph Report :

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Petrol prices have been raised by over Rs 4 a litre and diesel by Rs 2 on the eve of the budget session and without being taken up in the cabinet.

Government sources held out hope for a partial rollback in Parliament in the event of an uproar. UPA partner Trinamul Congress and opponent Left have already opposed the price mark-up.

Petroleum minister Murli Deora blamed rising global oil prices and expressed the hope that “people will understand”.

Global rates are now ruling around $70 a barrel — almost double the $35-40 range in December and January when Indian petrol and diesel prices were cut by Rs 10 and Rs 3, respectively, in two instalments.

The decision to raise prices was taken after Deora today met the Prime Minister and Sonia Gandhi. The matter was not taken to the cabinet but colleagues were kept in the loop, Deora said. The weekly cabinet meeting is scheduled to meet tomorrow, when Parliament also convenes.

Even after the increase, the state-run oil companies would lose Rs 2 a litre on petrol and Rs 1.62 a litre on diesel, Deora said.

By keeping cooking gas and kerosene prices unchanged, oil firms would continue to lose Rs 92.96 per cylinder and Rs 15.26 a litre, Deora said.

The latest move suggests that the Centre has, for the time being, mothballed the proposal for deregulation or market-determined pricing.

Trinamul leader Mamata Banerjee did not comment, perhaps because she is part of the cabinet, but deputed Bengal legislature chief Partha Chatterjee to respond. “The rise in price of petrol and diesel is untimely. We, under the leadership of Mamata Banerjee, will oppose the move as it hurts ordinary people,” Chatterjee said in Calcutta.

Unwittingly or otherwise, Mamata’s railway added a princely 3 paise to the oil price. The utility had last night nudged up the siding and shunting charge — a fee it takes to handle oil wagons. The contribution of the fee hike to the new price is 3 paise per litre, sources said in Calcutta.

The CPM politburo said the government had shown “contempt for Parliament by taking such a decision on the very eve of the budget session”.