India's fuel price hike divides rich and poor

By Krittivas Mukherjee

NEW DELHI (Reuters) - Indians were divided on Wednesday over the biggest hike in fuel prices in 12 years, with the poor saying it would hit their pockets hard, while the more comfortable shrugged it off as inevitable given global trends.

On the streets of the capital, New Delhi, Balaram, an office driver earning a little over $100 a month, and businessman B. Hans were in opposite corners.

While Balaram worried how to afford now more expensive cooking gas from his tight household budget, Hans, who drives a Mercedes, was more relaxed but said a lower rate of increase would have been good for those less well off.

"Already milk, vegetables, wheat -- the price of everything has gone up so much," Balaram said.

"And now gas and petrol. With my salary, after paying my rent and my expenses, what will I send home? How will I feed my family and what will I save?"

India raised prices of petrol and diesel by about 10 percent and a cylinder of cooking gas by 17 percent after its state-run oil companies said they were on the verge of bankruptcy, hammered by crude oil's race to record highs while having to sell fuels at heavily discounted prices.

The government spared kerosene, used by many of India's 1.1 billion people for cooking and lighting. A litre of diesel, the popular auto fuel, will now cost 34.5 rupees ($0.8) in Delhi.

"Well, what can I say? We have to pay, you see, even if we don't like to," Hans, whose monthly fuel bill is more than Balaram's salary, said.