Fuel price increases unveiled by the government on Wednesday were modest but will be unpopular, Prime Minister Manmohan Singh said on Wednesday, adding India must get used to paying the "economic cost" for petroleum products.
In a rare televised address to the nation hours after the domestic petrol and diesel prices were hiked by about 10 percent, Singh said the government remained committed to minimising the impact of surging crude oil prices.
But he said "issuing oil bonds and loading deficit on oil companies" did not represent a permanent solution to the problems caused by oil's record-breaking rally.
Doing so while restricting the revenues of state oil firms would choke a vital growth sector of the economy.
"We need to learn to adjust to this new international scenario. And we need to pay the economic cost of petroleum products," Singh said.
He also urged state governments, many of which tax petroleum products substantially, to contribute to the union government's efforts by reducing taxes and levies.
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