Diesel price hike over burdens SMEs
Updated: Jul 02, 2013 03:20:22pm
New Delhi, Jul 2 (KNN) The latest hike in diesel prices, the sixth in this year, has come as a big setback to the industry, particularly the small and medium enterprises, which are battling power outages in several states by resorting to generating energy from diesel run sets. The diesel price was yesterday hiked by 50 paisa per litre.
After the last hike in June, diesel in Delhi will now cost Rs 50.84 per litre from today as against Rs 50.26 till yesterday.
In Mumbai, price has been hiked by 62 paisa to Rs 57.61 while in Kolkata it will cost Rs 55.16 a litre from today as against Rs 54.57 till yesterday. In Chennai, the price will increase by 61 paisa to Rs 54.15 a litre.
With acute power shortage in most of the states, industrial units in the region have become dependent on diesel-based power generators. The dependency on generators itself is hitting the industry.
"Industries are already incurring huge losses due to daily massive power cuts. Most of the production is carried out with the help of generators. However, the price hike is going to over burden the industries and traders and the production cost would again go up,'' said General Secretary, Tamil Nadu Small and Tiny Industries Association, C K Mohan.
“The diesel hike is going to increase prices of all the raw materials and escalate the cost of end-products. There will also be indirect effects on the small industries like transportation costs will go up, manufacturing cost will shoot up,” he added. He insisted that the Centre rethink the decision.
Chairman of the Indian Wind Power Association, K Kasthurirangaian said that the small industries are bound to depend on diesel which is a much more expensive mode of power supply.
“Because the wind industry is not getting any support from the government of India, small industries are not investing into wind mills. So, they are not left with any option but to use generators which run on diesel. Thus, there cost of production goes up tremendously. Only if the industry gets financial support from the government, only then they will invest into wind mills, which is the cheapest mode of energy available,” he added.
In May, the Indian Wind Power Association (IWPA) had urged the government on behalf of the small and medium industries to reinstate accelerated depreciation (AD) for installation of wind mills for self-consumption.
The micro, small and medium-scale enterprises here were struggling to survive because of the power situation and the diesel price would force many to down shutters. It will also affect the employees.
State-owned oil firms were allowed in January to raise diesel prices by up to 50 paisa per litre every month till entire losses on the fuel are wiped out.
"In pursuant to Government order dated January 17, oil marketing companies were authorised to increase the retail selling price of diesel within a small range every month until further order. Accordingly since then, diesel prices are being raised on a regular basis.
"In further continuation of the above, it has been decided to increase the retail selling price of diesel with effect from midnight of July 01/02 by Rs 0.50 per litre (excluding VAT)," IOC said.
Despite the sixth increase in diesel rates, oil firms are losing Rs 8.10 per litre on diesel.
Last week, oil firms had hiked the petrol price by Rs 1.82 per litre, excluding VAT, as rupee depreciation made import of raw material (crude oil) costlier.
According to an IOC statement, under-recovery on sale of retail diesel has been steadily increasing mainly due to depreciation in rupee coupled with increasing international prices.
In addition to diesel, oil marketing companies continue to suffer under-recovery (loss) on sale of kerosene of Rs 32.05 per litre and LPG of Rs 368.50 per cylinder.
Meanwhile, petrol price was freed from government control in June 2010, government had in January allowed oil firms to raise diesel price in small doses of 40-50 paisa a litre every month till such time that losses on fuel sales are wiped out. (KNN)
After the last hike in June, diesel in Delhi will now cost Rs 50.84 per litre from today as against Rs 50.26 till yesterday.
In Mumbai, price has been hiked by 62 paisa to Rs 57.61 while in Kolkata it will cost Rs 55.16 a litre from today as against Rs 54.57 till yesterday. In Chennai, the price will increase by 61 paisa to Rs 54.15 a litre.
With acute power shortage in most of the states, industrial units in the region have become dependent on diesel-based power generators. The dependency on generators itself is hitting the industry.
"Industries are already incurring huge losses due to daily massive power cuts. Most of the production is carried out with the help of generators. However, the price hike is going to over burden the industries and traders and the production cost would again go up,'' said General Secretary, Tamil Nadu Small and Tiny Industries Association, C K Mohan.
“The diesel hike is going to increase prices of all the raw materials and escalate the cost of end-products. There will also be indirect effects on the small industries like transportation costs will go up, manufacturing cost will shoot up,” he added. He insisted that the Centre rethink the decision.
Chairman of the Indian Wind Power Association, K Kasthurirangaian said that the small industries are bound to depend on diesel which is a much more expensive mode of power supply.
“Because the wind industry is not getting any support from the government of India, small industries are not investing into wind mills. So, they are not left with any option but to use generators which run on diesel. Thus, there cost of production goes up tremendously. Only if the industry gets financial support from the government, only then they will invest into wind mills, which is the cheapest mode of energy available,” he added.
In May, the Indian Wind Power Association (IWPA) had urged the government on behalf of the small and medium industries to reinstate accelerated depreciation (AD) for installation of wind mills for self-consumption.
The micro, small and medium-scale enterprises here were struggling to survive because of the power situation and the diesel price would force many to down shutters. It will also affect the employees.
State-owned oil firms were allowed in January to raise diesel prices by up to 50 paisa per litre every month till entire losses on the fuel are wiped out.
"In pursuant to Government order dated January 17, oil marketing companies were authorised to increase the retail selling price of diesel within a small range every month until further order. Accordingly since then, diesel prices are being raised on a regular basis.
"In further continuation of the above, it has been decided to increase the retail selling price of diesel with effect from midnight of July 01/02 by Rs 0.50 per litre (excluding VAT)," IOC said.
Despite the sixth increase in diesel rates, oil firms are losing Rs 8.10 per litre on diesel.
Last week, oil firms had hiked the petrol price by Rs 1.82 per litre, excluding VAT, as rupee depreciation made import of raw material (crude oil) costlier.
According to an IOC statement, under-recovery on sale of retail diesel has been steadily increasing mainly due to depreciation in rupee coupled with increasing international prices.
In addition to diesel, oil marketing companies continue to suffer under-recovery (loss) on sale of kerosene of Rs 32.05 per litre and LPG of Rs 368.50 per cylinder.
Meanwhile, petrol price was freed from government control in June 2010, government had in January allowed oil firms to raise diesel price in small doses of 40-50 paisa a litre every month till such time that losses on fuel sales are wiped out. (KNN)
Loading...
