The Hindu Business Line : Left parties urge Govt not to raise petro prices

THE Left allies of the UPA Government on Tuesday asked the Centre not to raise petrol and diesel prices and instead cut excise duty and put the increase in road cess in abeyance. This, the allies felt would contain the impact of rise in international oil prices.

Clearly indicating that raising the petrol and diesel prices was not the only solutions to contain the impact of surge in international oil prices, the Left parties today asked the Government to "try and make adjustments in other areas".

Speaking to presspersons after a meeting with the Petroleum Minister, Mr Mani Shankar Aiyar, on the issue, the CPI(M) leader, Mr Sitaram Yechury, said, "We would not like the burden arising from rise in international crude prices to be passed on to consumers."

The meeting with the Left leaders followed the Petroleum Minister's meeting with the Union Finance Minister, Mr P. Chidambaram, on Monday.

The Finance Ministry had rejected the Petroleum Ministry's plea for cut in duties while maintaining that the duty changes announced in Budget proposals were revenue neutral.

"When all the sectors of the economy are bearing the burden of increase in international oil prices, the Finance Ministry too ought to take a part of the burden by way of reduction in excise duty on petrol and diesel," Mr Yechury said.

He also asked the Finance Ministry to reconsider the 50 paise increase in road cess. The Government can consider keeping in abeyance the hike in road cess on petrol and diesel to Rs 2 per litre from the current level of Rs 1.50 a litre till the international oil prices eases.

The Left also asked that the proceeds of cess collected on crude oil should go back for the development of the industry.

The Central Government collected over Rs 5,400 crore every year as cess, of which only a marginal amount goes back to the industry. If the amount is passed on to the industry, it will lessen the burden on them, they argued.

To keep in line with the rise in cost of raw material (crude oil prices), increase in taxes and additional cost for producing cleaner fuel has necessitated a price hike in petrol by Rs 5.77 per litre and diesel by Rs 5.26 per litre.

Later, Mr Aiyar said he would appraise the Prime Minister, Dr Manmohan Singh, and the Union Finance Minister about the concerns and demands of the Left allies.

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