The Hindu Business Line : Petrol, diesel prices may go up by Re 1

CONSUMERS may face a hike in price of petrol and diesel by Re 1 per litre each from May 16. With oil companies mounting pressure on the new Congress-led Government to allow a price hike in the wake of high global crude and product prices, the Left Front alliance partner's decision on consumer price increases is likely to decide the fate of the hike.

The oil companies have been pushing for a Rs 3 per litre hike in diesel prices and Rs 5 per litre hike on petrol in keeping with international prices. However, the compulsions of the outgoing government due to the recent Lok Sabha elections restrained it from undertaking any price hike. With the elections getting over, the public sector oil marketing companies have mounted pressure on the establishment to agree to a hike. Product prices were last raised on January 1, 2004.

The new government would also have to decide on the fate of the uncovered LPG and kerosene subsidy, which is set to soar to Rs 14,000 crore this year. Whether it adopts last year's formula remains to be seen.

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