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Thursday, Jun 05, 2008
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“Notional figures, not actual losses”

Special Correspondent

NEW DELHI: The Communist Party of India (Marxist) on Wednesday said astronomical figures for under recoveries of the public sector Oil Marketing Companies (OMCs), being projected as their losses by the government, are notional figures and not actual losses.

“The Government should realise that in a global context where price of crude oil is reigning at a high level, the only sustainable solution lies in restructuring duties on petro products and having a transparent pricing policy whereby the OMCs as well as the refineries do not retain hefty profit margins. What is at stake today is not the market capitalisation of the oil companies but the livelihood of the working people who are already suffering from back-breaking inflation,” the central committee of the CPI(M) said in a statement.

Taking note of the government assertion that the price hike would lead to additional earnings of Rs. 21123 crore for the OMCs, the party suggested that the amount could have been easily mobilised to provide relief through other measures.

The steps, suggested by the CPI(M), include using Rs. 7500 crore per annum cess collected from ONGC and Oil India Ltd to create a Price Stabilisation Fund from which the OMCs can be compensated.

If excise duties on petrol and diesel were cut by Rs. 3 per litre instead of Re. 1 per litre as has been done presently, a further relief of around Rs. 12000 crore can be provided to the OMCs.

According to figures in the Union Budget 2008, the Government is estimated to have lost Rs. 87992 crore in excise duty exemptions and Rs. 58655 crore in corporate tax exemptions in 2007-08. “The Government would not lose any revenue on account of the tax relief given to oil companies if it can phase out 15 per cent of these huge corporate and excise duty exemptions,” the party said.

It said the profit of Reliance Industries from refining business has increased from Rs. 5915 crore in 2005-06 to Rs. 10372 crore in 2007-08. “A windfall tax of 20 per cent on such profits from refining as well as oil and gas exploration can help in mobilising at least Rs. 2000 crores,” the party suggested.

The All India Democratic Women’s Association (AIDWA) called upon women to resist the steep hike in petrol, diesel and cooking gas prices. “AIDWA demands that the government should immediately give up these measures that will contribute to inflation and instead take steps to curve the increase in prices,” Subhashini Ali, president and Sudha Sundararaman, general secretary of AIDWA said.

Calling upon the government to stem inflation and roll back the hike, they said the struggle to push back such policies has to be strengthened by all sections.

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