Allies, Opposition slam diesel price hike

Allies and opposition parties tonight attacked the government over the hike in diesel prices saying it will further hit the common man and demanded an immediate rollback.

The second-largest constituent of the UPA - Trinamool Congress, strongly opposed the increase in diesel prices.

"We are unhappy. We will not accept it and demand its rollback," West Bengal Chief Minister and Trinamool Congress president Mamata Banerjee said.

"We were not consulted for this," Railway Minister Mukul Roy, another TMC leader, told PTI from Kolkata.

TMC's reaction came after the government decided to hike diesel prices by Rs 5 per litre effective midnight tonight.

The Cabinet Committee on Political Affairs, headed by Prime Minister Manmohan Singh, this evening decided to raise diesel prices by Rs 5 per litre, excluding VAT (value-added tax).

It also decided to restrict supply of subsidised cooking gas to six cylinders per household in a year.

...

Diesel price hike is a cruel joke: BJP

The BJP termed the price hike as a cruel joke and "mortal blow" to the common man and farmers and charged the government with conspiring with petrol 'mafia'.

"This is a cruel joke on the common man in the country. It has hit farmers hard during the peak paddy sowing season. We will not allow this hike. We will not allow this government to loot the common man like this," BJP Vice President Mukhtar Abbas Naqvi said.

BJP leaders Yashwant Sinha said, "Diesel increase will have a cascading effect on the economy as a whole. Prices are already not under control, so this is going to contribute to overall inflation and create mayhem in the economy."

CPI National Secretary D Raja termed the decisions as "retrogade and anti-people".

"It will have an adverse effect on the prices of essential commodities which are already high. It will further increase hardship of common people. Government should not go ahead," he said. 

...

Auto makers welcome diesel price hike

The automobile industry welcomed the diesel price hike, saying it is a much-awaited decision. Auto-makers, however, added that the hike has come at a wrong time for the overall economy.

"It is a good decision but the Rs 5 per litre hike will hurt the consumer and market. We have been saying that diesel prices should be corrected in a staggered manner," Society of Indian Automobile Manufacturers (SIAM) Senior Director Sugato Sen told PTI.

Mahindra & Mahindra Chief Executive (Automotive Division) Pravin Shah said: "This is a much-debated and much-awaited decision. For the auto industry, it is a welcome one as diesel needs to be priced at market value.

"However, for the overall economy it has come at a wrong time. The overall sentiment is weak and this will further add to inflation".

The Cabinet Committee on Political Affairs, headed by Prime Minister Manmohan Singh, this evening decided to raise diesel prices by Rs 5 per litre, excluding VAT (value-added tax).

Diesel in Delhi costs Rs 41.32 a litre and with this hike it will cost Rs 46.95, after considering 12.5 per cent VAT on the hike.

Sen said the hike in diesel price could encourage buyers, who have been deferring purchase, to come back to the market and demand of petrol vehicles could improve.

General Motors India Vice-President P Balendran said: "In the long term when the price difference between petrol and diesel fuels reduces, obviously sales of petrol vehicles will increase. However in the short-term, the diesel price hike will not have any impact on boosting sales as the market continuues to be subdued".

He also welcomed the step saying the auto industry has always been in favor of market-driven price for diesel.

Charging the Congress-led UPA government at the Centre with lacking economic ideas to tackle
the fuel price hike, Tamil Nadu Chief Minister Jayalalithaa demanded immediate rollback of Rs 5 hike in diesel
prices, besides the ceiling on supply of subsidised cylinders.

"The argument that increase in global crude prices and falling value of Indian Rupee against US Dollar are reasons
for diesel price hike lacks substance. If concrete steps had been taken to control the falling value of the Rupee besides
taking into account domestic crude output and the profit made by oil companies, this hike could have been avoided,"she said.

Not taking permanent action and blaming global crude prices and Rupee depreciation to increase fuel prices was not
a proper economic measure. It would only further increase inflation, she said in an official statement.

Charging the UPA government with constantly betraying the people, she said the hike would have a cascading effect with
immediate increase in fares of private transport, ultimately affecting all sections of society,including students,tourists,
and passengers even as prices of essential commodities and vegetables could go up.

Further, the ceiling of six subsidies cylinders per year would be insufficient for a family, the Chief Minister said.

"Expressing my strong condemnation to this hike which will affect all sections of society, I demand the rollback of the
hike in diesel price and ceiling in cylinder subsidy, if the UPA government is really concerned about the people,"she said.