Diesel Price Hiked by Rs 5 per Liter

Indian government announced a hike in heavily-subsidized diesel price by Rs 5 a liter to check fiscal deficit and limited availability of cooking gas cylinders per family to six per year. The hikes come into effect midnight on Sept. 13, 2012.

The Cabinet Committee on Political Affairs (CCPA), chaired by Prime Minister Manmohan Singh, took the decision, which has been decried by a combative opposition and even allies as "anti-people."

UPA's second-largest constituent, Trinamool Congress, demanded a rollback, with party chief Mamata Banerjee saying she would have been very happy if she could have withdrawn support from the regime rather than be party to such "anti-people" policy.

The steep hike in diesel prices is expected to affect a wide gamut of transportation ranging from locomotives to heavy duty trucks.

The government cited financial compulsions to justify the controversial price hike, which could fuel inflation and burden the common man who is already reeling from spiraling prices of basic commodities.

The government however said diesel and cooking fuel prices have not been revised since June 2011.

The Congress defended the government's decision to hike the price of diesel.

The Bharatiya Janata Party (BJP) slammed the hike, saying it would have "cascading effect" of cost of essential commodities, resulting in further inflation and price hike.