M A I N   N E W S

For companies’ sake
Income cess proposed
Bhagyashree Pande
Tribune News Service

New Delhi, May 27
This is a case of protectionism of oil companies going too far with the oil ministry suggesting to the finance minister to cut taxes on petrol and diesel and instead levy a cess on incomes of people.

At the meeting held today between the two ministers oil minister Murli Deora has proposed that there should be a levy of surcharge on personal incomes and corporate incomes so that oil companies can be saved. Sources in the oil ministry say all proposals are being considered and put forth but it will take its own course before the final decision is taken. The final decision that lies with the UPA government will definitely be a painful one.

Chidambaram, who is fully aware of the high refinery margins that the oil companies are making in wake of the rising crude, has rejected the proposal to cut excise or customs duties.

The plea of the oil ministry is that the oil companies will not be able to recover full money on the products sold.

The reality being that oil companies want the payment of products at the international prices (for crude that is refined here), whereas the finance ministry wants the oil companies to bear some of the burden and is only ready to pay bonds sufficient to meet the expenses, say sources.

Such a belt tightening measure as suggested by the finance ministry will mean that the oil companies will not have enough money to carry out wasteful expenses like sponsoring cricket matches and car rallies, hiring cricketers as brand ambassadors and paying for foreign trips of government officials, say sources.

Deora failed to convince the finance minister of the urgency to cut import and excise duties and on the calculation of Rs 2,00,000 crore revenue loss expected on petrol, diesel, LPG and kerosene in the coming year 2008-09.

In the meantime, pressure tactics on part of the oil ministry continues with additional secretary S. Sundereshan, saying the decision has to be taken soon as oil companies cannot wait for another week and the crisis needs to be defused at the earliest.

The oil ministry is not in favour of compensating IOC, BPCL and HPCL beyond one-third of the total under-realisation on fuel sales.

It has also suggested limiting the burden on upstream firms like ONGC to 33 per cent as had been in the previous year and wanted the rest of the revenue loss to be met through either price increase or duty rejig, sources said.

Hoarding begins
Tribune News Service

New Delhi, May 27
Oil minister Murli Deora may say that the oil marketing companies are not hoarding petroleum products, but the ground reality is different. In Punjab, the three major tap points (the depots of companies from where petrol dealers lift their supplies) in Jalandhar, Sangur and Bhatinda are not being supplied petrol.

Petrol pump dealers say that the supplies from the Indian Oil and the HPCL depot have been erratic from the past one month. The supplies from Mathura and Panipat refinery of the Indian Oil that feeds the three major tap points of Punjab are not suppling petrol to the region.

Petrol pump dealers said oil companies had already started hoarding supplies in anticipation of petrol price hike.

“They are not only cutting supplies, but also forcing us to sell only branded fuels and that is the only supply available in some petrol stations,” said a dealer from Jalandhar.

According to dealers, the HPCL Jalandhar Depot has been locked and the supplies from that depot are not being received for over a month.

Sangur Depot has also being affected, as the supplies have been drastically cut down by the IOC, the Bhatinda depot, which is a cooperative depot of all three oil companies.

Some dealers say that the situation in Jammu and Kashmir is worse as there is no refinery to feed the region.