The Central government today decided to hike diesel prices by Rs 5 per litre effective midnight tonight, but left petrol, kerosene and LPG rates untouched.
The Cabinet Committee on Political Affairs, headed by Prime Minister Manmohan Singh, on Thursday evening decided to raise diesel prices by Rs 5 per litre, excluding VAT (value-added tax).
Diesel in Delhi costs Rs 41.32 a litre and after this hike, it will cost Rs 46.95, after considering 12.5 per cent VAT on the hike.
Petrol needed a hike of Rs 6 per litre but the government offset that by reducing excise duty by Rs 5.50 per litre from existing rate of Rs 14.78 per litre.
The committee also decided to restrict supply of subsidised cooking gas to six cylinders per household in a year. Households buying more than six cylinders will have to pay the market rates.
Describing the hike in diesel prices as a cruel joke and "mortal blow" on the common man and farmers, BJP today accused the government of conspiring with petrol 'mafia' and said it will not allow the hike and take to the streets instead.
"This is a cruel joke on the common man in the country. It has hit farmers hard during the peak paddy sowing season. We will not allow this hike. We will not allow this government to loot the common man like this," BJP Vice President Mukhtar Abbas Naqvi said.
BJP leader Yashwant Sinha said the hike will have a cascading effect on prices and will contribute further to inflation.
"It is a mortal blow of Rs 5 increase in diesel price and will cause hardship. Had it been raised in small amounts it would not have been that objectionable or difficult. Diesel increase will have a cascading effect on the economy as a whole. Prices are already not under control, so this is going to contribute to overall inflation and create mayhem in the economy," Sinha said.