The government has hiked prices of petrol and diesel prices by Rs 4 per litre and Rs 2 per litre respectively. The government though decided to leave prices of kerosene and liquefied petroleum gas (LPG) untouched. The hike comes into effect from midnight. Addressing a hurriedly-called press conference, Oil Secretary RS Pandey said. “It has become necessary to marginally increase the prices of petrol and diesel against the under recoveries,” Pandey said.

The hike was necessitated because of rising international crude oil prices which have doubled to USD 70 a barrel since December,” Petroleum Minister Murli Deora told reporters here. Deora only consulted party leadership and Prime Minister Manmohan Singh to decide on the hike. Usually, the fuel price revisions are referred to the Cabinet.

 “In case oil prices go down like the way it went to USD 40 per barrel recently, the difference will be passed on to consumers,” Petroleum Secretary Murli Deora said.

The under-recovery on current prices stands at Rs 70,000 crore, of which the price hike will shave of Rs 14,000 crore. The government has committed to bear Rs 30,000 crore as subsidy burden — the final subsidy burden thus stands at Rs 26,000 crore.