labels: industry - general, economy - general
Auto fuel prices hiked news
21 June 2005

New Delhi: The government raised retail petrol and diesel prices by about seven per cent on Monday, the first increase since November 2004.

The raise comes on the back of China and other Asian nations raising fuel prices in recent months. India kept postponing the decision for weeks, largely due to opposition from the ruling coalition's Left front and other allies.

Petroleum minister Mani Shankar Aiyar said after a cabinet meeting that the increase would bring prices more in line with soaring crude prices and stem the losses of state-run oil firms.

"We have increased petrol prices by Rs2.50 and diesel by Rs2.00. The oil firms' profit must be adequate to meet their investment in the hydocarbon sector," Aiyar told reporters.

India imports 70 per cent of its crude and retailers and refiners have been forced to keep their prices at the same level for seven months, even though crude prices have gained about 35 per cent since early January.

Analysts said the move would have a limited impact on inflation and demand.

The price of kerosene and cooking gas, which are heavily subsidised and sold below the cost of production, have not risen. Oil prices soared to a record above $59 a barrel on Monday.



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Auto fuel prices hiked