New Delhi, June 1
The government is planning a moderate hike of Rs 1-1.50 per litre in petrol and diesel prices under a new scheme in which ONGC will be asked to bear part of the burden arising from increase in duties and spurt in global oil prices.
The price hike and the new subsidy sharing scheme may be cleared when Prime Minister Manmohan Singh meets Finance Minister P. Chidambaram and Petroleum Minister Mani Shankar Aiyar sometime tomorrow.
Petrol price needs to be raised by Rs 2.87 a litre and diesel by Rs 3.73 per litre in line with the hike in excise duty and road cess and raw material (crude oil) becoming dearer.
Meanwhile, the Left parties today threatened to launch a nationwide agitation if the government goes ahead with the imminent hike in oil prices.
Talking to mediapersons after meeting the Prime Minister, Mr Manmohan Singh, leaders of the Left parties said they had suggested alternatives whereby the burden of oil price hike could be minimised.
“Government should seriously consider these suggestions. If despite these suggestions, the prices are increased, we will launch protest action,” CPM politbureau member Sitaram Yechury and CPI general secretary A.B. Bardhan said.
CPM politbureau member Sitaram Yechury said the Prime Minister indicated that the government would be incurring losses to the tune of Rs 2,500 crore due to increase in the international crude oil prices.
CPM general secretary Prakash Karat and his party colleague Sitaram Yechury in their meeting with the Prime Minister, lasting about 30 minutes, impressed upon the need that public sector oil firms should bear larger burden arising from the increase in duties and spurt in global oil prices.
They indicated that upstream firms like Oil and Natural Gas Corporation (ONGC) should be roped in to bear part of the Rs 2.87 a litre hike in petrol and Rs 3.73 per litre raise in diesel prices required in line with the hike in excise duty and road cess and raw material (crude oil) becoming dearer.
He said the Left parties have suggested alternatives. He said excise duty and other tax proposals in the Budget, which were claimed to be revenue neutral, have infact added to the cost of oil prices.
The road cess, which has been increased by 50 paise, to meet the infrastructure development could be suspended this year to meet the deficit.
The import parity in pricing of petroleum products is quite irrational in view of India’s own indigenous capacity in refining sector, which has reduced import of petroleum to minimum.
This has actually resulted in undue refining margins specially to stand alone private refiners gaining the most with the gross refining margins going as high as $ 12 per barrel compared to $ 4 to 6 per barrel before the present pricing mechanism came into force.
