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Petrol, diesel costlier
Livid Left calls for nationwide stir on June 28
Tribune News Service

New Delhi, June 20
The government today hiked the prices of petrol and diesel by Rs 2.50 and Rs 2 per litre, respectively, after a gap of seven months, leaving the Left parties fuming, which called for a nationwide strike on June 28.

The UPA government, however, spared mass cooking fuel LPG and kerosene from the increase.

A 7 per cent increase in the petrol and diesel prices, which would come into effect from midnight tonight, had been warranted due to increasing prices of international crude oil, the government said.

Incidentally, the price hike announcement came on a day when more than 90 per cent of petrol stations in the country were shut, demanding an increase in commission.

CPI national secretary D. Raja said: “The Left parties do not agree with the government on increasing the prices of petrol and diesel. It will have a cascading effect and heap a huge burden on the common man and adversely affect the economy, which is already witnessing an upward trend in inflation and general price rise.”

“We are not dogmatic, but realistic. That is why we had given several suggestions to the government, but it did not consider these. It is also politically incorrect to increase the prices,” he added.

With this oil price hike, India has joined other Asian nations, including China, in hiking the petrol and diesel prices in recent months. Oil prices in the international market, however, touched a new high of $59 per barrel and indications are that the country’s oil requirement would touch to 80,000 barrel per day.

Oil companies are not very happy with the government’s decision, as the CCEA had not acceded to their demand. They had sought an increase of Rs 4.68 per litre in petrol and Rs 5.13 per litre on diesel.

“We have basically gone back to the principle of equitable burden-sharing between the government, the consumers and the oil companies,” Petroleum Minister Mani Shankar Aiyar told reporters after a Cabinet meeting.

He said the objective behind the oil price increase was that “our oil sector companies should not suffer cash loss. Their profits must be such as to service their equity obligations and profits must be adequate to meet the investment requirements of the future.

Mr Aiyar said the upstream firms Oil and Natural Gas Corporation (ONGC), GAIL (India) Ltd and Oil India Ltd will continue to share the revenue loss of oil marketing firms on LPG and kerosene this fiscal.

“This is a one-time hike and we may consider reverting to the mechanism of fixing prices every fortnight only after international oil prices stabilise,” he said.

Mr Aiyar said upstream firms contributed about Rs 3,000 crore towards sharing of losses on LPG and kerosene sale in 2003-04. This amount nearly doubled in 2004-05. “This subsidy-sharing scheme will continue in 2005-06,” he added.

However, four Left parties in a joint statement, while urging the government to reverse the decision and take measures which can absorb the burden of the increased international oil prices, called upon the people all over the country “to join together to register their protest by coming out on the streets on June 28.”

The CPM, the CPI, the RSP and the Forward Bloc said it was “unfortunate” that the government had not taken up the alternatives given by them to avert the price hike.

Among the suggestions given in this regard were cancellation of additional cess of 50 paise per litre of petrol for highways, making changes in the excise duty pattern so that it did not lead to retail price hike and doing away with import parity in product price.

The Left parties had suggested the creation of a price stabilisation fund to meet global fluctuation in crude prices with the cess collected on indigenous crude amounting to Rs 5,400 crore per annum. They had sought a review of the duty drawback payment to petro product exporters by private refineries.

“While it is true that international oil prices have been rising, the government in the Budget itself changed the excise duties which led to an added burden of Rs 1.70 per litre of petrol and Rs 1.15 per litre of diesel. The road cess of Rs 1.50 has been increased by 50 paise to Rs 2.00,” the statement said.


Petrol stations closed as dealers observe strike

New Delhi, June 20
Thousands of dealer-operated petrol stations in India remained closed today as part of a nationwide strike demanding an increase in dealer commission.

But the 24-hour strike called by the Federation of All-India Petroleum Traders (FAIPT) did not affect normal life, as hundreds of company-run and private outlets remained open across the country.

FAIPT president Ashok Badhwar, however, said, “The strike was total. We have shown our solidarity.”

The dealers, who observed a similar strike in April, have been demanding that their commission be increased to five per cent from 1.59 per cent on petrol and 1.27 per cent on diesel paid currently.

He said the petrol station dealers would go on an indefinite strike from next month if their demands were not met.

All but 24 petrol pumps out of the 375 in Delhi were closed.

In Maharashtra, around 1,700 dealer-run petrol stations remained closed as were 1,400 outlets in Bihar and 1,300 in Tamil Nadu. Over 3,300 petrol outlets remained closed in West Bengal.

Reports from Andhra Pradesh, Assam, Goa, Gujarat, Haryana, Orissa, Punjab and Tripura said all dealer-operated petrol stations in these states joined the nationwide shutdown.

In Kerala, around 1,200 petrol stations remained open, but expressed their protest by hoisting black flags. — PTI

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