The Central government has decided to decontrol the oil sector by freeing up the petrol and diesel prices in order to maintain a balance in public finances and private companies to offer better quality fuel and services to the Indian customers. Auto sector and auto companies have hailed the move by Manmohan Singh government calling it as “prudent move” to supplement the growing economy. Now the Indian market will be governed by the trading prices and domestic prices will rise and fall accordingly similar to Dubai or Singapore markets.
"This decision to link fuel prices to market prices is the only prudent approach for a rapidly growing economy like India," Society of Indian Automobile Manufacturers (SIAM) President Pawan Goenka said in a statement. “The auto industry anticipates that this increase in fuel prices may not have any significant adverse impact on sale of vehicles due to the buoyant market demand for vehicles in the country," he added.
Effective from Friday onwards, petrol will be costlier by Rs. 3.50 and diesel will be expensive by Rs. 2. Cooking gas will be expensive by Rs. 35 and kerosene will be pricier by Rs. 3. Despite the hike, a 80-paise gap remains between the street and present market prices of diesel. There may be another revision to bring the two at par in a fortnight.
Opposition had opposed the move but government vehemently defended the move stating that it cannot subsidize people driving more cars every day. However, kerosene still remains subsidized by Rs. 15 and cooking gas by Rs. 225.
