Already burdened under the intense pressure of inflation, Indian consumers on Thursday night got slapped with a steep increase of Rs.5 in the price of diesel.
To intensify the burden, the government also declared that no household would be able to get more than six subsidized cooking gas cylinders (LPG) per year. It means they will have to buy the seventh and any more cylinders at the market price of Rs. 746 per cylinder.
The government bit the bullet to help oil and gas companies improve their deteriorating financial conditions. The harsh decisions will help oil and gas companies to rake in an additional Rs. 20,300 crore.
Out of the Rs. 5 increase in diesel price, Rs. 1.50 is on account of hike in excise duty, while the rest of the increase will hack the under-recoveries of the Oil Marketing Companies (OMCs) by as much as Rs. 15,000 crore in the rest part of the current fiscal. But even after the recent increase, the under-recoveries on account of sale of diesel in the current year will remain above Rs. 1.03 lakh crore.
The Opposition led by BJP criticized the move, saying it would hit the farmers and the poor hard.
Criticizing the increases, BJP vice president Mukhtar Abbas Naqvi said, “This is a cruel joke on the common man in the country. It has hit farmers hard during the peak paddy sowing season.”
BJP said it would not allow the announced increase. It compared the increase with the loot of the common man by the government. The increase was also criticized by the government’s allies like Samajwadi Party and Trinamool Congress.
In June last year, the government had increased the price of diesel by Rs. 3 per litre.