The Hindu : National : Petroleum Minister blames States for high prices

Online edition of India's National Newspaper
Thursday, Dec 09, 2004

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National

Petroleum Minister blames States for high prices

By Our Special Correspondent

NEW DELHI, DEC. 8. The Petroleum and Natural Gas Minister, Mani Shankar Aiyar, today blamed the States for the high prices of petroleum products, saying that while the Central Government had bitten the bullet by revising some duties, the State Governments are ``not willing to take a small pellet''.

While the Union Government had taken a ``hit'' of Rs. 4,500 crores by revising downwards some Central levies, the States ``had not risen to the occasion'' by not responding to the Petroleum Ministry's plea to restructure the present duty regime, he said while replying to a calling attention motion in the Rajya Sabha on the ``exorbitant rise in [the] prices of petroleum products.''

``I have received only acknowledgements from 15 Chief Ministers. Only Orissa has indicated that it is taking some steps.''

`Non-responsive CM'

He specifically named the Tamil Nadu Chief Minister, Jayalalithaa, as one of the non-responsive Chief Ministers because while ``all other CMs have not commented on the increase in prices of petroleum products, there have been series of vicious statements from her but no action on the sales tax... ''

``Unless the States cooperate, the fiscal regime can never become genuinely rational or sensible,'' he said. Mr. Aiyar dismissed allegations of the pricing regime lacking a human face.

The total oil subsidy this fiscal would touch a record Rs. 25,000 crores. ``If, despite these figures, you tell me I do not have a human face, one will have to change the definition of human face.'' Calling for a holistic policy on petroleum products and referring to losses suffered by IBP, he warned that a similar fate would overtake all profit-making companies if the problem was not recognised in its entirety.

He also ruled out diversification by oil public sector undertakings in view of their large profits.

``It is not enough to look at returns. Oil PSUs are not Kamadhenus but provide investment in energy security. Let them focus on that instead of going in for outrageous diversification schemes.''

`Double standards'

Earlier, participating in the discussion, the BJP leader, Yashwant Sinha, accused the Left parties of double standards.

``We do not believe in the policy of running with the hare and hunting with the hound.

You (Left parties) support the Government from inside and oppose it outside. You show white flag inside and red flag outside. This is hypocrisy,'' he said.

Dipankar Mukherjee (CPI-M) said if resource mobilisation was the only problem in not further reducing taxes on petro products to ward off the effect of the hike in crude oil prices, the Government would do well to collect mounting tax arrears of over Rs 87,000 crores instead of burdening the poor.

He wanted to know whether the Government was contemplating a cap on refining margins to check undue profits particularly of private oil companies.

C. Ramchandraiah (Telugu Desam Party) questioned the export of petroleum products and called for its regulation.

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