The New Nation - Internet Edition

BBC Online

India has raised fuel prices by 10%, the second such increase this year, because of the rising cost of oil.

India imports nearly 75% of its crude oil requirements and controls the price of domestic fuel products to help contain inflation and protect the poor.

The latest increase is being heavily criticised by business leaders who say it will fuel inflation. Communist parties, which support the government, are also opposed and plan nationwide protests over the move.

Many Indians are already lining up at petrol stations to fill up their vehicles ahead of the hike which comes into effect after midnight.

An increase in domestic fuel prices was long expected in India because of the record rise in global oil prices.

We were left with no optiont due to the relentless increase in international oil prices

Petroleum Minister Murli Deora

But this being an election year, the matter was debated for 10 days before the cabinet announced a 10% increase in retail fuel prices.

While petrol prices have been increased by five rupees (13 cents) a litre, diesel prices have been raised by three rupees (eight cents).

And a cylinder of cooking gas will now cost 50 rupees ($1.25) more than before. The price of kerosene remains unchanged.

India's Petroleum Minister, Murli Deora, said the move was necessary because state-owned oil companies were losing tens of millions of dollars.