NEW DELHI: Demonstrators protested across India on Saturday against a government move to reduce popular fuel subsidies which is expected to spur double-digit inflation.

The decision, which raised prices of gasoline, diesel, kerosene and cooking fuel from midnight on Friday is part of a move by the government to lower its deficit and slash huge subsidies it gives state-run oil firms.

Demonstrators from India`s main opposition Bharatiya Janata Party (BJP) blocked junctions in the capital New Delhi to protest at the decision, snarling traffic in the city`s commercial core.

"Down with the government," shouted the protesters, who turned out despite scorching summer heat as riot police gazed on.

The demonstrators burnt effigies of Prime Minister Manmohan Singh, architect of India`s moves in the early 1990s to liberalise the country`s economy.

In Kolkata, capital of Marxist-ruled West Bengal state, thousands of people were stranded as bus and taxi operators went on strike to protest against the hike.

Protesters in Kolkata staged marches, shouting: "Roll back the price increases."
Petrol stations also closed in the state to protest at the government`s decision which pushed up petrol prices by an immediate 3.5 rupees (seven cents) a litre to over 50 rupees and diesel prices by two rupees a litre.

The Congress-led government announced Friday it would end petrol subsidies immediately and completely lift them on diesel later.

It said it would retain subsidies on kerosene, used by the poor for lighting and cooking, but that its price would also rise.

Protests were also held in the northern state of Punjab while the Marxist-led government in the southern state of Kerala called a day-long general strike to protest at the step.

"The fresh increase will put a further burden on the common man who is already bearing the brunt of high food inflation," said Sanjay Tandon, a BJP leader in Punjab.

Economists and the government say the fuel price increases will add around a percentage point to inflation, which is already running at more than 10 percent.

BDST: 1757 HRS, June 26, 2010
NJ