The Hindu : Front Page : Petrol price up by Rs. 5, diesel Rs. 3, LPG Rs. 50

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Thursday, Jun 05, 2008
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Petrol price up by Rs. 5, diesel Rs. 3, LPG Rs. 50

New Delhi Bureau

Left parties call for “powerful” protests from today

NEW DELHI: The United Progressive Alliance (UPA) government on Wednesday announced a steep hike in fuel prices.

It increased the price of petrol by Rs. 5, diesel by Rs. 3 and LPG by Rs. 50 a cylinder, but did not touch kerosene.

Almost all Opposition parties, the Left and the UPA’s allies criticised the government for the “anti-people” step and threatened to launch nationwide protests.

The left parties called for a “powerful, nationwide protest movement” from Thursday till June 11.

They said they would mobilise people to conduct strikes, picketing, demonstrations, and rail and road blockades to register their protest against “this unjustified burden.”

In a joint statement, the four Left parties that extend outside support to the government demanded a review of the decision.

Explaining the circumstances behind the hike, which came into effect from Wednesday midnight, Petroleum and Natural Gas Minister Murli Deora said it was necessary to save the oil marketing companies (OMCs) which were incurring huge losses for the past several months. “This crucial decision is also related to the nation’s oil security.”

“When the prices were hiked in February, the Indian basket of crude oil was $67, which subsequently went up to $123. The OMCs’ under-recoveries could have gone up to Rs. 2.45-lakh crore this fiscal. Considering all these factors, we have resorted to a moderate hike,” he said.

Pointing out that an increase of Rs.21.43 a litre was now required on petrol, Rs.31.58 on diesel and Rs.353 on a cylinder of domestic LPG, keeping in mind the high global crude prices, he urged the State governments to cut their Sales Tax to provide some cushion to people.

Mr. Deora said the government had shared the burden by announcing a cut in the customs and excise duties. While it announced an across-the-board 5 per cent cut in the customs duties on crude and other petro products, the excise duty on petrol and diesel was cut by Re.1 a litre each.

This would result in the exchequer losing Rs. 22,660 crore. Though the OMCs would absorb Rs. 20,000 crore, they would get additional revenue of around Rs. 21,000 crore from the hike.

The Finance Ministry had agreed to issue oil bonds on a quarterly basis to recover the uncovered losses, he added.

“Proposals ignored”

The Left parties’ statement said their set of alternative proposals was ignored by the government and the only substantial step taken was the doing away with the 5 per cent import duty on crude oil.

“This [price hike] onslaught on the people comes at a time when they are suffering from a steep rise in prices of essential commodities. In the background of the failure of the government to tackle the rising rate of inflation, this hike will further aggravate the inflationary situation,” the statement signed by the general secretaries of the CPI(M), CPI, AIFB and RSP, Prakash Karat, A.B. Bardhan, Debabrata Biswas and T.J. Chandrachoodan respectively, said.

Not marginal: Karat

Describing the hike as “not a marginal increase but a substantial one,” Mr. Karat said it would have a very bad effect on the people who were already suffering in the wake of a rise in the prices of essential commodities.

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