Need not be the case. The rise is good after all.

Finally, the Indian government has taken a good move by de-regulating (removing subsidy) fuel prices terming it as the “only prudent” way to supplement the growing economy. The Government also claims that the move will not affect the sales of automobiles in India. Going ahead with this move, the Government will save as much as Rs 1000 crore a day, say analysts. The de-regulation also means that fuel prices will fluctuate depending on the price of crude oil globally. Another positive from this move will be the resurgence of Private sector fuel stations like Shell, Essar and Reliance who found it difficult to compete against government aided competitors.

Prices of petrol have gone up by Rs 3.5 while Diesel is now dearer by Rs 2 per litre. Although the government has not fully de-regulated the price of diesel (meaning another rise is imminent), the price of petrol is fully free from subsidy. However, the price of petrol if the Government taxes were NIL would be Rs 30 as against Rs 55 today. The rise in prices will also encourage people to drive more efficiently and switch off their vehicles in signals.

Society of Indian Automobile Manufacturers (SIAM) President Pawan Goenka said -

“This decision to link fuel prices to market prices is the only prudent approach for a rapidly growing economy like India,”

Hit the jump to read what the industry feels about the rise in fuel prices.

» Read more: Petrol and diesel now dearer by Rs 3.50 and 2.00 respectively