The Hindu : National : Withdraw excise duty hike on petrol: CPI(M)

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Saturday, Apr 09, 2005

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National

Withdraw excise duty hike on petrol: CPI(M)

By Our Special Correspondent

NEW DELHI, APRIL 8. The Communist Party of India (Marxist) today demanded that the Government withdraw the hike in the excise duty of diesel and petrol, a proposal made in the Union budget. It said the move would lead to an increase in the retail prices of fuel.

Charging the Finance Minister, P. Chidambaram, withbeing "clever," the CPI(M) said that his claim that the reduction in import duty of crude and reduction in excise duty of kerosene and liquefied petroleum gas (LPG) had made the hike in the excise duty of diesel and petrol "revenue neutral" was not true.

"There is incremental revenue of Rs. 3,000 crores per annum on excise duty hike in petrol and diesel. We understand the Government is considering another hike [in fuel prices]," the Polit Bureau member, Prakash Karat, said.

The party said that after the excise hike, the retail price of diesel would go up by 93 paise and by Rs.1.13 a litre after sales tax, which is 12 per cent on diesel. In the case of petrol, the price would go up by Rs. 1.72 a litre and to Rs.2.23 a litre after 20 per cent sales tax.

Mr. Karat said that in its first reaction, the party had welcomed the proposal to reduce customs duty, as it could not see that the Finance Minister had recalibrated the excise duty.

He said the CPI(M) suggested that the Government set up a price stabilisation fund from the cess of Rs.1,800 a tonne it collected on crude oil produced by the Oil and Natural Gas Commission and Oil India. The total accumulation was in the region of Rs. 5,500 crores, and since this money was not used for development of oil sector, it agreed with the Parliamentary Standing Committee recommendation that this should be used as price stabilisation fund to take care of oil price fluctuations in global market.

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