M A I N   N E W S

Oil price to go up, Left unconvinced
Tribune News Service

New Delhi, May 10
The government today seemed to be failing in its efforts to convince the Left parties over the proposed hike in oil prices, though hinting that it would have no option but to increase the price after the spurt in global crude oil prices, now crossing $70 a barrel.

Despite putting up a strong opposition to the proposed hike, the Left parties made it clear they had no intention to bring down the government on this issue, while demanding a review of the duty structure on oil products.

In a presentation to the Left party leaders, including Sitaram Yechury of the CPM and Gurudas Dasgupta, and media persons, Petroleum Minister Murli Deora claimed that after the spurt in international crude oil prices, the state-owned oil companies were likely to incur an under recovery of about Rs 75,512 crore during 2006-07, as against Rs 39,595 crore during last year.

The government was forced to revise oil prices in September last year, he said, to partly set off that under-recovery by revising taxes, besides instructing upstream oil companies to share the burden by passing on the subsidy of Rs 14,000 crore and issuing bonds of Rs 11,500 crore to oil marketing companies.

The Left party leaders instead suggested cut in duties and CNG pricing policy to mitigate the surging international oil prices.

Mr Deora, however, said, “We have not taken any decision on the hike in oil prices, and I have still to meet Finance Minister P.Chidambaram on this issue.”

The issue is likely to be raised in the Parliament this week.

Rejecting any proposal to hike oil prices, CPI leader Gurudas Dasgupta said his party would not support any such move, at a time when the government had not used the option of reducing taxes amounting to over Rs 78,000 crore annually.

Mr Yechury said, “We also want that public sector companies should be in a good financial position, but the government should consider bringing down taxes, besides import duty on crude oil.”

The Oil Ministry said according to the oil companies, prices of petrol need to raised by Rs 9.33 per litre, diesel by Rs 10.43 per litre, kerosene by Rs 17.16 per litre and LPG by Rs 114.45 per cylinder, if prices were to be brought in parity with imported costs.

Officials said the government was likely to work out a compromise by proposing a hike of Rs 2-3 per litre in petrol and diesel, besides marginal hike in LPG, but without touching the kerosene prices.


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