The Hindu : National : Fuel prices: States cutting ST commended

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Sunday, Jul 02, 2006

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National

Fuel prices: States cutting ST commended

Special Correspondent

Other States should follow suit: Deora

New Delhi: Petroleum and Natural Gas Minister Murli Deora has commended State governments that had exempted sales tax on the new prices of petrol and diesel.

In a letter to Chief Ministers of Andhra Pradesh, Haryana, Tamil Nadu, Himachal Pradesh, Uttaranchal, Maharashtra, Goa and Delhi, he said the reduction in sales tax by these States was ``commendable'' and supplements the Centre's efforts to keep the impact of rising world oil prices at the minimum on the consumers. He stressed the need for other State governments to follow suit.

The retail prices of petrol in eight States had been reduced ranging from Rs.0.39 a litre to Rs.1.17 a litre. The reduced retail prices of diesel ranged from Rs. 0.21 a litre to Rs. 0.58 a litre.

Centre shares major burden

The Centre, on its part, decided to share a major part of the burden by issuing oil bonds worth Rs. 28,300 crore. In addition, the oil PSUs would be sharing a significant part of the burden during 2006-07, which together with the Government of India account for about 84 per cent of the impact of steep rise in international oil prices. With these steps, it was possible to keep the prices of LPG and kerosene unchanged while the increase in prices of petrol and diesel have been kept at the minimum level possible.

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