The petrol price was hiked on Wednesday by a record Rs 7.54 per litre as rupee had a free fall, an unpopular decision that was attacked by allies of UPA government who demanded its immediate rollback holding it as unacceptable.
The hike, the third in one year, came a day after end of the Budget session of Parliament and Prime Minister Manmohan Singh speaking of the need to take 'difficult decisions' on the third anniversary of UPA-II.
The decision of the oil marketing companies effective midnight on Thursday is the steepest hike in petrol price ever, the previous increase being Rs 5 per litre.
Petrol price in Delhi has been hiked by Rs 7.54 per litre to Rs 73.18 a litre. In Mumbai, it will cost Rs 78.57 per litre as against Rs 70.66 a litre. In Kolkata, Rs 77.88 per litre and Chennai Rs 77.53 a litre.
Oil firms had twice raised rates by Rs 5 per litre - on May 15, 2011 when prices in Delhi were hiked from Rs 58.37 a litre to Rs 63.37 per litre and on May 24, 2008 when rates were raised to Rs 50.56 a litre.
The hike came under all round attack from political parties but significantly DMK, which is part of the government, sought its rollback.
The government had decontrolled petrol price in June 2010 but rates were last increased on November 4 last year. This despite oil price rising by 14.5 per cent and 3.2 per cent fall in value of rupee against the US dollar.
Price of diesel, kerosene and cooking gas were last raised in June last year.
However, Banerjee said her party would not topple the government like the CPM as it would create economic and political instability in the country.
"We cannot accept the price hike burden on the people," she said asking why there was no consultation on the issue.
BJP and other opposition parties including the Left called it 'unreasonable' and a big burden on the common and threatened agitation against it.
"We demand immediate rollback of petrol price hike. The decision is anti-people," SP spokesman Rajendra Chowdhury said.
During 2011-12, petrol prices were revised five times in order to bring domestic prices in line with prices in the international market. Of these, rates were hiked on three occasions and lowered on two other. The last revision in rates on December 1 was a reduction of Rs 0.78 per litre to Rs 65.64 a litre.
"Thereafter, due to domestic market conditions, it has not been possible to change selling price of petrol in line with international prices," Indian Oil Corp (IOC), the largest oil retailing firm in the country, said in a statement.
IOC along with Bharat Petroleum and Hindustan Petroleum lost Rs 4,651 crore in revenue since the last revision.