The Hindu : PM meets Naik, Sinha on price rollback

Online edition of India's National Newspaper
Saturday, Mar 16, 2002

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National

PM meets Naik, Sinha on price rollback

By Our Special Correspondent

NEW DELHI, March 15. The Prime Minister, Atal Behari Vajpayee, today held a review meeting of the oil sector with the Finance Minister, Yashwant Sinha, and the Petroleum Minister, Ram Naik, even as the Bharatiya Janata Party (BJP) is putting pressure on the Government for a rollback of LPG and kerosene prices.

The BJP spokesperson, Vijay Kumar Malhotra, pointed out that since these prices have already come into effect, the issue is being taken up with the Prime Minister who had already given an assurance to this effect to a delegation of the BJP Mahila Morcha.

The review meeting of the oil sector is being held in the backdrop of a rise in world crude oil prices. Official sources said this could go up to Rs. 20 per cylinder and Rs. 1.35 per litre of kerosene.

The rise in international prices will also have an impact on other petroleum products, which are now being linked to import parity prices. The excise and customs duties on these products have been simultaneously raised which is expected to lead to a rise of Rs. 2.50 per litre on motor spirit (petrol) and about Rs. two per litre on diesel. The Petroleum Ministry has been arguing against the imposition of ad valorem duties on petroleum products by the Finance Ministry on the grounds that this would lead to an exponential rise in prices when world markets harden.

The situation has already been created with the latest spurt of about three dollars per barrel in the international markets.

The original estimates on pricing as on April 1 when the administered pricing mechanism is dismantled were based on crude price of 20 dollars per barrel while now prices have touched 23 dollars per barrel. Apart from the LPG and kerosene prices, the BJP is also keen on other unpopular measures to be reversed such as the 20 per cent income tax exemption for savings scheme for income tax payees with an income of less than Rs. 5 lakhs per annum.

Mr. Malhotra said this issue was not such a high priority right now since the new tax proposals would only take effect in the next fiscal.

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