M A I N   N E W S

Petrol to cost Rs 2.50 more
Tribune News Service

New Delhi, June 3
The Centre hiked petrol and diesel prices by about Rs 2.50 and Rs 1.50, respectively, with effect from midnight tonight, more than 48 hours after the government took an unprecedented decision of stating that a price hike was due to be announced.

The Centre’s remarks on Saturday that a price hike would be announced two days later, reportedly fuelled speculation among petroleum dealers and several petrol depots reported ‘out-of-stock’ situation.

Petroleum Minister Ram Naik, however, pleaded ignorance about such a situation and promised strong punitive measures if any evidence was found in this regard.

“Petrol pumps are mandatorily required to display the stock situation. If any dealer has resorted to hoarding in anticipation of a price hike, strong measures will be taken”, Mr Naik told newspersons here today.

The Petroleum Minister denied that oil companies had issued any specific instructions to petrol dealers in this regard.

Mr Naik said the government had decided to execute to simultaneous reduction in the excise duty on diesel from the existing 16 per cent to 14 per cent and on petrol from 32 per cent to 30 per cent respectively.

Thus a litre of petrol in Delhi will now cost Rs 28.94, up from the existing Rs 26.54, in Mumbai it will cost Rs 33.47 — an increase of Rs 2.69, in Kolkata it will cost Rs 29.39, an increase of Rs 2.40 while in Chennai the price of petrol will be Rs 31.05 per litre.

The price of diesel in Delhi will be Rs 17.99 per litre, Rs 22.85 per litre in Mumbai, Rs 18.38 per litre in Kolkata and Rs 19.63 per litre in Chennai.

The prices will apply in states having sales tax on petrol at 25 per cent and on diesel at 20 per cent. In places where sales tax rates are different, the increase will be lower or higher depending upon the tax rates.

Mr Naik said oil companies would make further adjustments on a fortnightly basis with the changes in the refinery gate prices which are fixed in line with the international oil prices.

“With this, the domestic prices of retail petroleum products in the country will get aligned with the international prices, in line with the practice prevailing in other deregulated economies”, Mr Naik said.

The excise duty rates will be reviewed every quarter in the light of international oil prices, retail selling prices of petrol and diesel, their financial impact on the domestic market and other economic factors, the minister said.

The next review will fall due in September 2002. “This mechanism will ensure protection of the domestic consumers from the international oil market price volatilities”, he said.

The government had also decided to compensate the oil marketing companies for the financial burden, estimated to be around Rs 2,000 crore, they are carrying due to the non-revision in the consumer prices over the past two months, he said. The international prices of crude have increased by about $ 5 per barrel since February this year, and since the dismantling of the administered pricing mechanism from April 1 this year, the oil companies have cushioned the effect.

Cong to protest

New Delhi, June 3
On the hike in diesel and petrol prices, the Congress reacted sharply saying the government should not have allowed the price hike at a time “when the country is passing through a difficult phase and there is economic slow down.”

Reacting to a question on whether the party’s stand against the price hike will not amount to “double standards” as the Congress itself advocated dismantling of the Administered Price Mechanism and was now protesting against the price compatibility, Mr Sharma said “we are principally not opposed to dismantling of the APM... But there have been times in the past two years when the international crude price decreased but the benefit was not passed on to the consumers.” TNS