New Delhi, May 16
At a time when the UPA government is congratulating itself on the completion of one year in power, leaders of the Left Parties today met Finance Minister P. Chidambaram and Petroleum Minister Mani Shankar Aiyar to build up pressure on the government not to hike petrol and diesel prices.
Repeating their stand, they reminded the Finance Minister about their demand to restructure duties on the crude oil and petroleum products to compensate the oil companies, instead of pushing for hike in oil prices.
In their one-hour meeting with both ministers, they demanded rollback of excise duty increase announced in the Budget, shelving the proposal to raise road cess and creation of price stabilisation fund out of the cess collected on domestic crude oil.
Oil marketing companies have claimed that petrol prices need to be raised by Rs 4.59 a litre, half of it (Rs 2.52) on account of increase in excise duty. Similarly, diesel prices need to be hiked by Rs 4.97 per litre, including Rs 1.53 due to excise effect. The required increase also includes Rs 0.61 per litre each due to increase in road cess.
After the meeting, CPI secretary D. Raja told reporters, “We have asked the government not to increase prices but consider other ways (of containing the impact of global spike).”
Mr Dipankar Mukherjee said the Finance Minister’s statement while presenting the Budget that the duty changes were revenue neutral and would not result in any increase in retail price, was ‘false’.
“It is felt the proposed changes in duty structure have actually helped the standi alone private refineries, specially Reliance, while hitting the public sector oil companies. The government effort should be to protect the interests of consumers and state-owned refiners and not the biggest stand-alone private refiner,” said Mr Mukherjee.
Hoping the government would not further burden the consumers, D. Biswas, general secretary of the All-India Forward Bloc, wondered whether it was necessary at this time to levy additional cess.
“We have urged careful examination of the levies that accounted for almost 60 per cent of the retail prices of petroleum products. We have also urged the Finance Minister to consider restricting import parity price only for crude imports and not petroleum products,” said Mr Biswas.
The meeting was held at the behest of the Left parties that wanted to present their case for opposing a hike in retail prices of petrol and diesel in the context of state-owned oil marketing companies stressing that a freeze on prices had hit their profit margins.
Indian Oil Corporation, the largest refining and oil marketing company, alone expects the under-recoveries due to the freeze in prices of petrol, diesel, kerosene and cooking gas between April 1 and May 15 to be Rs 58.6 billion ($1.34 million), while during 2004-05 fiscal it was Rs.203.1 billion.
Meanwhile, Indian Oil Corporation (IOC), the country’s largest oil firm, claimed to suffer a revenue loss of Rs 2,600 crore in the two months ending May owing to oil price-freeze by the government.
