Diesel price hike: Govt under fire from allies, Opposition, aam aadmi

New Delhi, September 14: The government has finally bitten the bullet on fuel price hike raising the price of diesel by Rs 5 per litre and limiting the usage of LPG to six cylinders per household. Sources say the Sonia Gandhi-led Cabinet Committee on Political Affairs was against it, but were finally convinced by Prime Minister Manmohan Singh to end policy paralysis and bring in big ticket reforms.

But the the government now finds itself under fire from not just the Opposition, but its own allies as well as the 'aam aadmi'. Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee was the first to react. She will take out a rally on Saturday in Kolkata, demanding a rollback.

Speaking to IBN18 Editor-in-Chief Rajdeep Sardesai, Mamata said, "It wasn't discussed with the UPA allies. I have a great respect for UPA because we know that the government must continue, there should be stability. But at the same time if the deisel price is increased, it will affect the farmers, it will effect the common people and it is very difficult as people cannot survive with this."

She said that the matter was quite serious and her party would not tolerate things that affect people, adding that the government must withdraw the hike.

Key UPA ally DMK, too, has condemned the hike. Party supremo Karunanidhi said, "Already the prices of essential commodities are so high. This hike would further affect the poor and the middle class and increase inflation."

Opposing the diesel price hike, UPA's close ally NCP also demanded a rollback saying the decision will further burden the common man.

"The Centre should consider rollback in diesel price and should not put a cap on subsidised LPG especially given the high price of essential goods thereby affecting the common man," NCP spokesperson Nawab Malik said.

Terming the hike in diesel price as an anti-people step by Congress-led UPA government, the Samajwadi Party announced that it would hold a sit-in against the move across the state.

"The move to hike diesel price is anti-people and will increase prices. Samajwadi Party opposes the move and will hold sit-in across the state to protest the hike," SP spokesman Rajendra Chaudhary told PTI.

BJP leader 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.

The 'aam aadmi' was the worst affected. "This decision is going to adversly affect a hard working common man like me. It's getting difficult to drive a car these days," said a consumer in Delhi.

Another consumer in Mumbai said, "The increase in the price of diesel will affect the poor like us the most. As a result of this inflation will increase."

Earlier post:

Diesel price hiked by Rs 5/litre; petrol, kerosene spared

New Delhi, September 13(PTI): The government today decided to hike diesel prices by Rs 5 per litre effective midnight tonight, but left petrol, kerosene and LPG rates untouched.

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

Petrol needed a hike of Rs 6 per litre but the government offset that by reducing excise duty by Rs 5.50 per litre from existing rate of Rs 14.78 per litre.