The government has increased the prices of Petrol by a hefty Rs 4 and diesel by Rs 2 but has spared kerosene and LPG. The hike would come into effect from midnight today.

The decision was taken by the centre at a meeting of the Congress Core Commitee which among others was also attended by Prime Minister, Dr. Manmohan Singh. The hike follows the international oil rates which have crossed $70 per barrel.

Petroleum Minister Murli Deora had said on Tuesday that the rising international oil rates were a matter of “grave concern”.

The government could have avoided by price hike by opting for an excise duty cut which is levied at Rs 11.35/Litre on Petrol and Rs 1.60/Litre on Diesel. Along with the excise duty Rs 2 road cess  is charged on every litre of petrol.

With the international crude oil prices touching $73 per barrel on Tuesday, the state run oil companies were loosing crores every day on fuel sales. The duty cut would also costed the governement of revenue which could have affected its development plans.