Click to play videoNew Delhi: The oil spill is getting bigger with airlines hiking fares and now the Prime Minister is hinting that further subsidising the petrol bill will hit the economy.
Taking that summer vacation just got more expensive. All domestic airlines have announced a hike in fares. This comes on the back of a steep hike in aviation turbine fuel.
Jet, Kingfisher, Deccan and Air India have all hiked fares in two slabs. On flights up to 750 kilometers you will now pay Rs 300 more and on flights beyond 750 kilometers the hike is Rs 550.
The aviation minister says the situation is a cause for concern.
Talking about the price hike Aviation Minister Praful Patel says, “If a sector is reeling that means its not good for the economy.''
What’s also not good for the economy is the continuing subsidy on the fuel bill said the Prime Minister.
Prime Minister Manmohan Singh said, “We have not raised the price of kerosene. Even petrol does not reflect world trends. We need wider political consensus.''
And as if on cue, UPA ally of four MPs, the Revolutionary Socialist party said its withdrawing support if only from the Left-UPA coordination committee meeting and urged its other Left partners to follow suit.
In an already panicky situation, the news was enough to send the Sensex crashing 300 points.
The Government may be testing the political waters but the fact is a fuel price hike is necessary for the economy and who better to understand these signals then the man who made India's growth story happen.
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