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With an eye on assembly polls in UP, Govt defers decision to hike petrol prices
Prolonging the suspense over hiking petrol prices, oil marketing companies (OMCs) have decided to defer the decision on any upward revision at least for this fortnight, amid a general sense within the UPA Government, that with politically sensitive States like Uttar Pradesh, Uttarakhand and Punjab set to go for assembly polls within the next one month, it would not be prudent to take any step, which goes against the prevailing public sentiments.
Though sources close to the development told The Pioneer that all the three company heads namely Indian Oil Corporation (IOC), Hindustan Petroleum Company Ltd (HPCL) and Bharat Petroleum Company Ltd (BPCL) had a discussion among themselves on Monday evening over the matter, they apparently decided to defer the upward revision of petrol prices, as the message from the Oil Ministry was not so encouraging.
With the public mood already not being so friendly towards the Government, especially post the Lokpal Bill fiasco in Parliament and the year-long agitation in favour of a strong public office regulator led by social activist Anna Hazare, the OMCs thought it prudent to keep the prices unchanged, sources said.
Though petrol prices were deregulated by the Government in 2010, effectively however, OMCs do keep the Oil Ministry in the loop before taking any decision on hiking the prices, as the Centre has majority stake in all the three companies.
An official in the know indicated that there could be another meeting among the three OMCs bosses today (Tuesday), but effectively the message is not to tamper with the existing prices, especially with assembly polls scheduled in the politically sensitive State of Uttar Pradesh on February 4 where the Congress is keen on reviving its fortunes.
“They may meet probably in the (Tuesday) afternoon or evening. However as of now there won’t be any change in prices, as the year-end sentiments were positive,” an official said.
That the decision was politically motivated though, could be gauged from the fact that the rupee depreciated to Rs 53.07 per US dollar in the second fortnight of December, based on which the rates on January 1 were to be decided.
Based on these sentiments, it was widely being speculated that petrol prices may be hiked by at least two rupees, however, political compulsion seems to have prevailed over economics.
Oil firms, as per the usual practice, revise the rates for petrol on the 1st and 16th of every month based on the average imported price of oil and exchange rates during the previous fortnight.
However, they had postponed a decision on the hike on December 31, 2011 as it was New Year’s eve, to January 2, 2012.
Petrol at Indian Oil Corp and Bharat Petroleum Corp petrol pumps in Delhi is now priced at Rs 65.64 per litre and at Rs 65.65 a litre on retail outlets of Hindustan Petroleum.
Oil firms had, at the last review on December 15-16, decided not to burden the consumers with about Re 1 per litre hike in petrol price needed at that time, as they felt Reserve Bank’s intervention may help arrest fall in rupee’s value.
The oil firms had in November last year cut petrol prices twice on drop in international oil rates.
The companies reduced petrol prices by Rs 2.22 per litre, or 3.2 per cent, from November 16, 2011 followed by a Rs 0.78 per litre cut from December 1, 2011.
Prolonging the suspense over hiking petrol prices, oil marketing companies (OMCs) have decided to defer the decision on any upward revision at least for this fortnight, amid a general sense within the UPA Government, that with politically sensitive States like Uttar Pradesh, Uttarakhand and Punjab set to go for assembly polls within the next one month, it would not be prudent to take any step, which goes against the prevailing public sentiments.
Though sources close to the development told The Pioneer that all the three company heads namely Indian Oil Corporation (IOC), Hindustan Petroleum Company Ltd (HPCL) and Bharat Petroleum Company Ltd (BPCL) had a discussion among themselves on Monday evening over the matter, they apparently decided to defer the upward revision of petrol prices, as the message from the Oil Ministry was not so encouraging.
With the public mood already not being so friendly towards the Government, especially post the Lokpal Bill fiasco in Parliament and the year-long agitation in favour of a strong public office regulator led by social activist Anna Hazare, the OMCs thought it prudent to keep the prices unchanged, sources said.
Though petrol prices were deregulated by the Government in 2010, effectively however, OMCs do keep the Oil Ministry in the loop before taking any decision on hiking the prices, as the Centre has majority stake in all the three companies.
An official in the know indicated that there could be another meeting among the three OMCs bosses today (Tuesday), but effectively the message is not to tamper with the existing prices, especially with assembly polls scheduled in the politically sensitive State of Uttar Pradesh on February 4 where the Congress is keen on reviving its fortunes.
“They may meet probably in the (Tuesday) afternoon or evening. However as of now there won’t be any change in prices, as the year-end sentiments were positive,” an official said.
That the decision was politically motivated though, could be gauged from the fact that the rupee depreciated to Rs 53.07 per US dollar in the second fortnight of December, based on which the rates on January 1 were to be decided.
Based on these sentiments, it was widely being speculated that petrol prices may be hiked by at least two rupees, however, political compulsion seems to have prevailed over economics.
Oil firms, as per the usual practice, revise the rates for petrol on the 1st and 16th of every month based on the average imported price of oil and exchange rates during the previous fortnight.
However, they had postponed a decision on the hike on December 31, 2011 as it was New Year’s eve, to January 2, 2012.
Petrol at Indian Oil Corp and Bharat Petroleum Corp petrol pumps in Delhi is now priced at Rs 65.64 per litre and at Rs 65.65 a litre on retail outlets of Hindustan Petroleum.
Oil firms had, at the last review on December 15-16, decided not to burden the consumers with about Re 1 per litre hike in petrol price needed at that time, as they felt Reserve Bank’s intervention may help arrest fall in rupee’s value.
The oil firms had in November last year cut petrol prices twice on drop in international oil rates.
The companies reduced petrol prices by Rs 2.22 per litre, or 3.2 per cent, from November 16, 2011 followed by a Rs 0.78 per litre cut from December 1, 2011.
