MUMBAI, March 22: With today's increase in petrol prices set out in the state budget, Mumbai becomes the costliest place to buy petrol in. The state government has hit commoners - just recuperating from a Re 1 cess on diesel levied by the Union Finance Minister in his latest budget - hard by hiking petrol prices by another 44 paise and those of diesel by 63 paise.This despite the fact that Mumbai boasts of two oil refineries of public sector majors Bharat Petroleum and Hindustan Petroleum. ``Though Mumbai residents are paying more in terms of high environmental cost due to refineries in its backyard, its residents have to pay more even in terms of prices,'' said oil firm officials.Thanks to the various state government taxes like sales tax, excise and octroi, fuel is more expensive in Mumbai than any other city of the country. Logically and economically speaking, Mumbai, which supplies fuel to most of western and northern India through its two refineries - apart from accounting for a bulk of theindigenous crude oil production - should enjoy the benefit of not having to pay for transportation. But the situation is quite to the contrary. For example, Delhi, which gets all its petrol and diesel supplies from Mumbai's refineries, pays an unbelievable Rs 5 (apprx) les than Mumbai.``It's as if Mumbai is being made to pay for making petrol. The government is making the cost of living higher in Mumbai, though standard of living has fallen drastically,'' added a corporate chief.Calling the hike ``unfortunate,'' Rahul Bajaj, Chairman of Bajaj Auto said: ``Instead of hiking petrol prices, the state government should have hiked only diesel prices due to high disparity between petrol and diesel prices. The government should control its own expenditure instead of levying new taxes on its people.''Companies like Bajaj Auto - one of the biggest motorcycle and scooter makers - will have to reconcile with lower sales as any hike in petrol affects the plans of a middle-class consumer to purchase atwo-wheeler. ``The Maharastra government should give up its populist subsidies which are not reaching the targeted audience. Instead, it should restructure its financials,'' Bajaj noted. ``With today's hike, oil prices in Mumbai will now be highest in the country. Maharashtra government's various taxes have made fuel more costly in Mumbai as compared to New Delhi or any other metro, which does not have any refinery inside the city limits,'' an oil analyst said.President of Indian Merchants Chamber (IMC) Y P Trivedi said the hike in taxes on petrol and diesel will have a cascading effect, and cost of living of the common man will become very high.Besides, the hike in petrol prices will make both auto rickshaw and taxi unions clamour for a hike in fares, while BEST will have to rethink its strategy of increasing fares as its fuel cost per litre has gone up by Rs 1.66 paise as a result of both the Union and state budget, analysts said.Mohan Gurnani of Federation of Associations of Maharashtra said thehike would affect essential commodity prices and transport. These things would become costlier by around 25 per cent in a single trip. ``The state government should give relief for essential commodity items,'' he said.Vijay Kalantri, president of All India Association of Industries said: ``This hike will put an extra burden on industries in which were planning to set up captive power plants using diesel as fuel.''
