In yet another development that has further agonised things for people in India, the central government has hiked the prices of petrol and diesel. In a recently made announcement, it was declared the petrol would now cost 75 paisa per litre more and in case of diesel, price has been increased by 50 paisa per litre. In fact, after inclusion of taxes, petrol and diesel would get dearer by around 91 paisa and 55-65 paisa per litre, respectively. A price hike was largely on the cards as authorities continue to bemoan the loss being incurred by them. Notably, this is the 12th time since January 2013 that prices have been hiked in India, thereby worsening the situation. Pretty clear cut reasons have been given by authorities to justify this sort of price hike. According to sources, the ever rising international crude oil prices along with the falling value of rupee have been key in influencing this price hike.
Indian Oil Corporation, the country's largest OMC, released a statement, which informed in detail about this price hike. “Indian Oil Corporation (IOC) has decided to effect an increase in the retail selling price of petrol by Rs.0.75 per litre excluding State levies [and] and increase in the retail selling price of diesel by Rs.0.50 per litre, excluding State levies…Since the last price change, the international prices of MS (motor spirit) have increased, and the rupee-dollar exchange rate has depreciated. There is a continued volatility in the international oil prices because of geopolitical and economic developments around the globe,” the statement said.
Out of all sectors, the automobile sector is going to be the worst affected by this price hike. It has been only a few days since car makers have released statistics for December and the picture is not a pretty one. Several car makers in the country have suffered from a drop in sales with some of them registering incredibly colossal losses. Now, it is being said that this hike will lead to a lot of problems and further dampen consumer sentiment. Experts feel that sales of diesel cars will be affected severely if things continue to be like this. 2013 was one of the worst years in the history of the Indian car market, which was severely affected by rupee depreciation, falling sales, recalls and controversies. Car makers in the country would be hoping for a change in fortunes in 2014 but developments like these will certainly not help their cause. However, the kinds of losses incurred by the oil ministry pretty much justify the price hike.
