The Hindu : National : Oil price hike cannot be deferred for long: Chidambaram

Online edition of India's National Newspaper
Wednesday, May 03, 2006

National

National

Oil price hike cannot be deferred for long: Chidambaram

Special Correspondent

COIMBATORE: UnionFinance Minister P. Chidambaram on Tuesday admitted that a hike in the price of petroleum products could not be put off for long.

"But it has nothing to do with the elections [in five States]," he said responding to a question, at a press conference here, on the spiralling oil price in the international market.

If the price of crude per barrel were to be in the range of $25-30, "it is purely an economic issue and an economic solution could be identified."

But when it shot up to $65-70, "it ceases to be an economic issue and becomes a complex political issue. Just the Finance Minister or the Petroleum Minister cannot solve this. Unless there is consensus among the political parties, there could be no solution".

Mr. Chidambaram pointed out that the Government was helpless in the matter. It was a "near-monopoly" of some nations and only they were determining the price. "A Russian Minister told me that he was planning with 45 dollars (per barrel of crude) in mind. Now he says he is getting a windfall."

Mr. Chidambaram said the price spiral in the world market was "artificial" and "unjustified." Asked how long the price hike in India could be deferred, he said: "Not very long."

There was zero excise and customs duty on kerosene and LPG. The Rangarajan Committee report (on duty structure) "is under consideration."

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