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Last Updated: Wednesday, 7 June 2006, 08:20 GMT 09:20 UK
Anger over India fuel price rise
Communist Party of India activists shout slogans against government
Communist parties say the rise is unjustified
India's political parties have been holding nationwide protests against an increase in petrol and diesel prices.

On Monday, the Indian government raised the price of fuel in the face of rising crude oil prices.

Petrol prices went up 4 rupees to 47.49 rupees a litre ($1.04, 55 pence) and diesel by 2 rupees to 32.45 a litre.

The move has been opposed by the main opposition Bharatiya Janata Party and communist parties which support the ruling Congress party-led coalition.

"The... government has increased the prices of petrol and diesel for an unprecedented seventh time within the last two years, amounting to a betrayal of the masses," BJP President Rajnath Singh is quoted as saying by the Press Trust of India.

Communist parties say they want the government to cut prices.

"The hike in oil prices is totally unjustified," D Raja, general secretary of the Communist Party of India, told Reuters.

The communists say the government should bear the price hike and if necessary, fund it with tax increases.


India's state-owned fuel retail outlets say they are losing billions of rupees by subsidising the cost of petrol to help the nation's economy.

The government says it held back from raising the price of kerosene, heavily used in poorer households.

Experts fear a rise in fuel prices - which had been unchanged since September - could dampen demand for oil and stoke inflation in the country.

India imports around 70% of the oil it needs and rising crude oil prices have been weighing heavily on its state-owned businesses which run 90% of the country's fuel retail outlets.

According to government estimates, state-run companies would have lost $16bn in the current fiscal year without any price rises.

Petroleum Minister Murli Deora said that the petrol and diesel increase was the "minimum possible hike" which the government could impose.

Mr Deora said that he was confident the left parties would eventually support his measures.

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