M A I N   N E W S

Pranab downplays Mamata threat
l Hardens stand on increase in petrol price
l Oil companies inefficient, says economic adviser
Tribune News Service

Kolkata/ New Delhi, Nov 5
Despite continued criticism of the hike in petrol prices, government spokesmen on Saturday appeared to rule out any reduction in petrol prices. Union Finance Minister Pranab Mukherjee downplayed the threat from Trinamool Congress to withdraw support from the UPA government. In Kolkata, an unfazed Mukherjee declared that it was perfectly legitimate for allies to voice their concern.

Since petrol price hikes do cause inflation and hurt people, he added, there should be no surprises if political parties and people criticise the move. “ They do not want to hear economic reasons”, he added for good measure.

While Mukherjee sought to explain why petrol prices had to be raised, the Economic Adviser to the government, Kaushik Basu, also in Kolkata on Saturday, declared that public sector oil companies suffered from operational inefficiencies. There was a lot of scope for the oil companies to improve their efficiency and raise their margins, he told reporters on the sidelines of an event he was attending. He also reiterated his stand that other petroleum products like diesel and LPG etc should also be deregulated. He had prepared a cabinet note on the subject, he revealed, which would shortly be circulated.

Oil companies needed to become more efficient like the Telecom companies, said Basu. When it was pointed out that there were already two private players, Reliance and Essar, in the oil sector, Basu retorted that the two companies were getting squeezed out because they did not have the support of or the subsidies from the government unlike the public sector oil companies.

Meanwhile, Congress spokesmen pointed out that Mamata Banerjee had not attended the meeting of the Empowered Group of Ministers (EGM), which decided to deregulate petrol prices in June last year, although she was a member. Still, her consent had been obtained and she was a party to the decision and never threatened to withdraw support then.

However, AICC general secretary Janardhan Dwivedi said in New Delhi, “ the party is concerned about the rise in prices and the party would like the government to take all possible steps required to give relief to the people”, he said and indicated that any policy could be ‘revisited’.

On TC chief stating yesterday that the matter would be taken up with the Prime Minister after his return from abroad, Mukherjee said, "They will take up some of their concerns with the PM. I don't find anything wrong with it." Singh returned to the Capital this morning.

Without making any reference to Trinamool's allegation that the party was not consulted before the price hike, Mukherjee said, "There is an EGoM. It consists of the representatives of all political parties which have a member in the Union Cabinet. Our partners in the coalition are members."

Stating that the UPA government has taken note of the protests by various political parties, Mukherjee said, "Naturally, when price is hiked and if it hits the people, the people will react. They don't like to listen to economic reasons."

"Only the price of petrol which was deregulated has increased. It (deregulation) did not take place today, the decision was taken on June 28, last year," Mukherjee said at the National University of Juridical Sciences.

No decision has been taken on price rise of diesel, kerosene and LPG, Mukherjee said. Since petrol is now a decontrolled commodity, oil companies are entitled to fix its price according to international market prices.

Mukherjee said the Centre had no role in fixing the price of petrol and hence he was helpless.

"There is a need to understand the issue in right perspective. We never said what the government should do and what policies it should make.”

Mukherjee said the combined loss of the BPCL and the HPCL in the first six months of the current fiscal was Rs 12,000 crore and the IOC was also likely to be in the red.

"If the oil companies are in the red, will they be able to raise resources from market? Will they be in a position to import crude that is required?", he asked. — PTI