Petrol price has been hiked by Rs 8.36 a litre in Hyderabad. This is the steepest hike ever made. Henceforth petrol will sell at Rs 81.44 a litre. Compared to other metropolitan cites, petrol is reportedly dearest in Hyderabad. Alas! Hyderabadis are a bit less fortunate.
The hike is said to be in order to compensate falling Rupee vis-a-vis the green back. Of late, Rupee depreciated to more than Rs 55 against dollar.
The hike is said to be less inflationary as the diesel is the fuel used by trucks in the transportation of essential commodities has been spared for now.
Petroleum constitutes a significant portion India’s imports basket. Despite produced domestically, it is not enough to impact the imports burden significantly. Hence, India is a net importer of the commodity. Also, because of the current global turmoil in financial markets investors have lost faith in currencies such as Euro. They have instead, eyed the dollar as a safe haven for their capital. Thus there is a rise demand for dollar on global scale.
Economists opine that the present hike has come in one go and hence it appears to be too massive. Had it been in piecemeal hikes over a longer period of time, the burden would not have been so heavy because the burden would be spread over a time.