The government that dithered over the issue till global crude prices touched an all-time high of 135 dollars a barrel, announced the increase in an election year.
While Left parties sought review and announced nationwide protests, the main opposition BJP said it was UPA government's "economic terror" on the common man.
"Congress will have to pay heavily for this," former Petroleum Minister and senior BJP leader Ram Naik said.
Petrol in Delhi will cost Rs 50.56 a litre after the hike, while diesel prices would go up from Rs 31.8 to Rs 34.8 a litre effective midnight n Wednesday. LPG prices have gone up by Rs 50 per 14.2-kg cylinder to Rs 344.75.
"We were left with no option," Petroleum Minister Murli Deora told a packed news conference after a meeting of the Cabinet Committee on Political Affairs (CCPA).
State-run Indian Oil, Bharat Petroleum and Hindustan Petroleum would have suffered a revenue loss of Rs 245,305 crore this fiscal if the prices had not been hiked and the across-the-board 5 per cent cut in custom duties on crude and petroleum products and a Re one per litre reduction in excise on petrol and diesel were not announced.
"Due to the relentless increase in international oil prices, it has now become necessary for the consumer... to shoulder a small part of the increased burden, through a marginal hike in prices," Deora said.
Petrol and diesel prices were last raised in February. The last steepest hike was Rs 4 a litre on petrol and Rs 2 per litre on diesel announced by the UPA Government in September 2006.