New Delhi, Nov. 4: Last Sunday, the government decided to keep oil prices on hold, ostensibly in the hope that international rates will soften after the uncertainty over the US election ends. George W. Bush is back as President, up go petroleum prices in India.
The blow is heavy as petrol will cost Rs 2.28 more a litre and diesel Rs 2.21 in Calcutta.
But cooking gas is an altogether different story where the government has come up with an ingenious formula. Like petrol and diesel, from midnight tonight a cylinder of cooking gas will cost more ' up by Rs 21.70. After that, every month, presumably starting December, the price will go up by Rs 5.
Petroleum minister Mani Shankar Aiyar said after a meeting of the cabinet committee on economic affairs that the Rs 5 increase every month will continue until the gap of Rs 158 between the actual price of a cylinder and the price at which it is sold now is wiped out. This means the price will go up by Rs 5 a month for more than two years.
Kerosene, described as the 'poor man's fuel', has not been touched.
CPI leader D. Raja said the Left parties would press for a rollback in the prices of LPG and diesel.
CPM leader Basudeb Acharya opposed the increase in the prices of all fuels, though his party had earlier limited its opposition to a hike in the rates of LPG and kerosene.
Railway minister Laloo Prasad Yadav, who was specially called for the cabinet panel meeting, said something that will rub salt into consumers' wounds. 'The hike in petrol and diesel prices will improve the health of those suffering from diabetes. They will now be forced to walk more and consume less petrol,' he said.
Earlier, the Left had suggested holding prices until after the US election in the belief that prices would ease once the question of who would be the next President was settled.
It is now known that Bush will be in the White House for four more years and oil prices have started climbing. In the US, the price rose yesterday to $50.88 a barrel, topping the psychological $50 mark after settling below it for the first time in a month on election day.
India's purchases are a mix of crude from various sources and they are cheaper than the US rate but not by much. The average price in the past month has been $43-44.
A second Bush administration will likely continue filling US emergency oil stockpiles despite high prices and could stoke nerves about Washington's policy in West Asia.
Prices had tumbled from last week's record high at $55.67, pressured by speculation that a win for Democratic challenger John Kerry would halt deliveries into the country's strategic petroleum reserve, and do more to encourage energy conservation.
Dealers had also speculated that Kerry's policy in energy-rich West Asia would be less aggressive than Bush's and more prone to move through diplomatic channels.
Did Indian leaders, too, pin their oil hopes on a Kerry victory'