Petrol price hike: UPA has lost its control over economy, says Yashwant Sinha

Senior Bharatiya Janata Party (BJP) leader Yashwant Sinha on Saturday took the Congress-led UPA Government to task over the latest petrol hike, claiming that the latter has lost its hold and control over the economy.

"The government has completely lost its control over the economy, on economic policy. They come out with huge big announcements, but nothing happens on the ground, and, this is the reason there is complete chaos as far as the Indian economy today is concerned," he said.

Sinha attributed the recent hike in petrol prices to the devaluation of rupee against the American dollar.

"The recent hike in petrol prices. In fact, there have been two major hikes in the recent days. Raising the price of petrol per litre by almost 4.50 Rs. to 5 Rs in various states. Now, this is not because the price of crude in the international market has gone up; it is because the rupee has declined against the dollar. And because the oil companies buy their crude in terms of dollars and sell petrol in terms of rupees. Therefore, they will incur a loss," said Sinha.

"This is the reason for the hike in petrol prices because the petroleum companies do not want to incur this loss. Why is the rupee devaluing against the dollar? I agree that the government cannot control the market, the rupee is being traded in the market, but the government can certainly control the circumstances which determine how the market will behave," he added.

Petrol price was yesterday hiked by Rs. 1.82 a litre, effective midnight. The hike is excluding (VAT).

This is the third increase in petrol price rates in June. The oil firms had from June 15 hiked prices by Rs. 2, excluding VAT; and before that 75 paise from June 1 onwards.

The consumers will now have to pay Rs. 68.58 for a litre in Delhi, Rs. 71.71 in Chennai, Rs. 76.90 paise in Mumbai and Rs. 76.10 in Kolkata.