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Ministry concealing facts: Brinda Karat

Sujay Mehdudia

“Facts given to support fuel price hike not true”

NEW DELHI: Asserting that the facts given by the Ministry of Petroleum and Natural Gas to support the recent fuel hike were not true, Member of Parliament and senior Communist Party of India (Marxist) leader Brinda Karat, has accused the Ministry of concealing the actual picture.

Asking Petroleum and Natural Gas Minister Murli Deora to clarify on the issues raised by her, Ms. Karat once again demanded that the recent price hike in petrol and diesel be withdrawn immediately.

In her letter to Mr. Deora, the CPI(M) leader asked: “Is it not a fact that Rs. 71,000 crore is not the actual financial loss absorbed by the Government but only a notional loss computed on the basis of the global price of petroleum products and not on the basis of actual production cost at refineries whether in the public sector or in the private sector.”

Ms. Karat demanded that the Government for the sake of transparency give the break-up of absorbed loss vis-À-vis the actual production cost of each petroleum product. The so-called under recoveries should not be mixed up with actual loss “to confuse people.”

‘Rise in Government income’

Posing another query, Ms. Karat said: “Is it not a fact, that on the contrary, far from the actual losses being absorbed, the income of the Government from taxes, duties, dividends from the oil sector has actually increased by around Rs. 35,000 crore during the current financial year? The Government has mobilised about Rs. 1, 80,000 crore compared to Rs. 1, 55,000 crore in 2006-07. The present hike will fetch the Government about Rs. 6,400 crore. Clearly, this amount could have been easily absorbed without a hike, if the same was adjusted from this additional revenue of Rs. 35,000 crore. This would have required a restructuring of the tax regime on petroleum products including elimination of ad valorem tax.

On the Ministry’s advertisement speaking about the need to protect the PSUs, Ms. Karat asked: “Is it not a fact that under the Oil Industries Development Act 1974, the Government has been collecting cess from oil produced by two oil PSUs — ONGC and OIL — for the purpose of investment in the petroleum sector by oil PSUs? Is it not true that while more than Rs. 70,000 crore had been collected by the Government till March 2007, only Rs. 900 crore had been allocated by the Government so far for the development of the oil industry?”

According to her the balance was appropriated by the Finance Ministry for revenue expenditure, thus depriving navratna oil PSUs of their due share.

“Is it not true that even for the current year, the Government is going to collect roughly Rs. 7,500 crore, which is being used for non-petroleum purposes? This is hardly a way to “protect” the oil PSUs,” she said.

“Protecting private firms”

Ms. Karat asked: “Is it not a fact that the Government is protecting the private sector companies due to tax exemption and duty drawback extended to private oil refineries. Would the Government clarify how much amount has been absorbed because of this pro-private sector tax policy?”

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