NEW DELHI; 13, Sep 2012:  Biting the bullet, the government today hiked diesel prices by a steep Rs 5.62 per litre and restricted the supply of subsidized cooking gas to 6 cylinders per household in a year to fetch an additional Rs 20,300 crore. It, however, left kerosene rates untouched and spared an increase in petrol price by cutting excise duty by Rs 5.50 per litre.

Reeling under the criticism of a policy paralysis and facing an urgent need to cut down the ballooning oil subsidy of Rs 187,127 crore, the cabinet committee on political affairs chaired by Prime Minister Manmohan Singh took the decisions which have come under strong attack from allies like TMC and SP.