Date:17/05/2005 URL: http://www.thehindubusinessline.com/2005/05/17/stories/2005051702250100.htm

Back Left opposes petrol, diesel price hike — Calls for duty restructure

Our Bureau

The Minister for Petroleum and Natural Gas, Mr Mani Shankar Aiyar, addressing a press conference in the Capital on Monday. — V. Sudershan

New Delhi , May 16

THERE was no breakthrough on the issue of raising petroleum product prices with the Left allies of the United Progressive Alliance (UPA) Government continuing to oppose any move to increase petrol and diesel prices.

The Left allies — CPI, CPI (M), Revolutionary Socialist Party and All India Forward Bloc — had a meeting with the Finance Minister, Mr P. Chidambaram, and the Petroleum Minister, Mr Mani Shankar Aiyar, here on Monday and maintained their stand that the Government should look at duty restructuring instead of pinching the consumers by increasing petroleum product prices.

Fuel prices were last revised in November 2004 and since then the Government has not allowed the oil firms to raise prices despite international crude touching new highs.

Speaking to presspersons after the meeting, Mr Aiyar said, "The Finance Ministry and the Petroleum Ministry have taken note of their concerns and would carefully examine them."

CPI leader Mr D. Raja said, "We have asked the government not to increase prices but consider other options." Mr Dipankar Mukherjee, CPI (M), said that the Government should put in abeyance the increase in road cess and roll back hike in excise duties on petrol and diesel.

The oil firms have been demanding a price hike. Citing huge under-recovery on sale of petroleum products, the industry has been looking at a rise in petrol prices by Rs 4.59 a litre, half of it (Rs 2.52) on account of increase in excise duty. Similarly, diesel prices need to be raised by Rs 4.97 per litre, including Rs 1.53 due to excise effect. The increase in petrol and diesel prices also includes Re 0.61 per litre increase on account of the road cess to Rs 2 per litre.

According to the industry, gross under-recovery on petrol, diesel, LPG and kerosene for 2004-05 and April 1 to May 15 is Rs 20,310 crore and Rs 5,860 crore, respectively.

There could be some reprieve on the oil front if present trends continue. The Indian crude basket was ruling around $46 a barrel on Monday, with the international crude prices hovering around $48.11 per barrel as of 10:30 GMT. The Indian basket stood at $46.19 on May 12 and above $46 on May 13.