The Hindu : National : Aiyar to meet Chidambaram on oil pricing issues

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Friday, Apr 22, 2005

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Aiyar to meet Chidambaram on oil pricing issues

Special Correspondent

`Hike under active consideration'

NEW DELHI: The Petroleum Minister, Mani Shankar Aiyar, is likely to meet the Finance Minister, P. Chidambaram, on Monday to discuss petroleum product pricing issues.

He is expected to take up the issue of increase in excise duty in the budget proposals which has resulted in a huge loss to the public sector companies during the first fortnight of April.

He told reporters on Thursday that he had sought time from Mr. Chidambaram and would examine the structural changes and pricing issues with him.The budget proposals have lowered customs duty on crude oil, kerosene, LPG, petrol and diesel but raised the excise duty on petrol and diesel. A parliamentary panel has also commented that though the duty changes were projected to be revenue neutral by the Finance Ministry, the hike in excise duty on petrol and diesel would net an additional Rs. 3,000 crores for the Centre.

`Hike under active consideration'

Earlier in the day, he told the Lok Sabha that hiking of oil prices was under "active consideration" following the record rise in world crude oil prices.

Replying to questions, he said a decision on raising the prices had not been taken "till now" but added "the matter is under active consideration".

As for price hikes in the past, he said that the UPA Government had placed lesser burden on consumers as far as oil prices were concerned.

Prices of petrol had been raised by 48 per cent under the NDA regime as against 13 per cent by the UPA Government while the figures for diesel were 112 per cent and 30 per cent respectively.

The Petroleum Ministry was holding discussions with the Finance Ministry on the issue of excise duty on petroleum products having been increased in the budget proposals.

He assured the House that all such factors would be taken into account while taking a decision on oil prices.

Referring to suggestions that prices need not be raised and excise duty could be reduced, he said this would benefit consumers in the short run, but would result in a decline in revenue generation and foreign investments in the long term.

Investments were needed to make the sector vibrant.

The Government was continuously monitoring the price situation and there had been an unprecedented, sharp and spiralling increase in international oil prices combined with volatility since the end of 2003.

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