India faces trouble as the Government is forced to hike prices for petroleum products and increase duty to pay for past oil subsidies
Kartik Punaskar
Jan. 31, 2008

One of the main reason why crude oil has approached $100 a barrel, is the blanket subsidy in oil prices through Government owned oil companies in India and China. India is finally facing the reality. The Government can no longer push the inevitable to the future. The price of petroleum products has to go up. In addition Government has to impose further duties on goods and services to pay for the past subsidies it artificially allowed, to stay popular among the native Indians.

Indian Union Cabinet is likely to make a decision early next week on raising petrol and diesel prices, besides a possible sharp increase in duties to contain the impact of surging international crude oil prices.

That can cause the recession in India and with global depression in horizon Indian economy can get depressed.

India is planning raising petrol price by Rs 4 or Rs 2 a litre and diesel by Rs 2 or Re 1 per litre. India is reeling with Rs 78,000 crore loss on fuel sales expected by the state oil firms in 2007-08 fiscal year.

Indian Government will not increase the cost of cooking gas.

India faces trouble as the Government is forced to hike prices for petroleum products and increase duty to pay for past oil subsidies
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