After tax blow, Get ready for fuel price hike

Oil companies are considering an increase — a substantial one at that — in the prices of automobile and cooking fuels as early as next week after the budget session goes into a break on March 30. It will be another piece of bad news for consumers hit by costlier products and services following finance minister Pranab Mukherjee's March 16 budget announcement to raise excise duty by two percentage points to 12% for most manufactured goods. He also raised the service tax to 12%. 

"If we don't have the capacity, how can we pay a subsidy?… Can we go back to 1990, when we had to sell our gold for a few millions?," Mukherjee said Sunday.

"We don't need permission for increasing petrol prices and the same will be done shortly," said a senior oil official, who didn't wish to be identified, said. "But for diesel and cooking gas, we'll have to wait for instructions from the government."

State-owned oil firms are looking at an increase of between Rs 4-5 a litre on petrol, Rs 3-4 a litre on diesel and Rs 50-75 on a cylinder of cooking gas (LPG).