The Hindu : Front Page : Price hike modest, says Manmohan

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Price hike modest, says Manmohan

Special Correspondent

NEW DELHI: Prime Minister Manmohan Singh, in an address to the nation on Wednesday, explained the circumstances under which the government effected the revision in the fuel prices.

“I know that the price increases we have had to announce today will not be popular, though they are only modest,” he said while noting that the Centre was taking a revenue hit of Rs.22,660 crore during the 10 months of the current fiscal.

To ensure that the burden on consumers is eased, Dr. Singh asked the States to reduce their local taxes and levies as well. “The Central government, oil companies and consumers are bearing a part of this immense burden. It is, therefore, incumbent on State governments, many of whom tax petroleum products substantially, to contribute to this national effort by suitably reducing state taxes and levies,” he said.

Nuclear energy

With the nuclear deal still hanging fire owing to opposition from Left parties, Dr. Singh seized the opportunity to garner support for going in for nuclear energy.

“We cannot remain captive to uncertain markets and unsure sources of supply. We have to develop renewable sources of energy, including nuclear energy,” he said.

Reiterating the Hobson’s choice that the government was in, he said the Centre had reduced duties on petroleum products to the extent possible. But given its commitments for expenditure, levies on these items could not be completely eliminated. “Thus a rise in prices is inevitable.”

The Indian economy, he said, was largely self-sufficient in food, but was not blessed in a similar manner as far as oil was concerned.

“We are, therefore, vulnerable to global trends in oil crisis,” he said adding that in the past four years, crude prices had increased by over three times from $39 a barrel in May 2004 to $130 a barrel.

To save on fuel costs, Dr. Singh appealed to the people to conserve energy. “Be it petrol, kerosene, LPG, electricity or even water — let us learn to save and use efficiently.”

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