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Our Bureau

New Delhi , Sept. 5

THE long-pending issue of raising the prices of petroleum products may be resolved tomorrow at a meeting of the Union Cabinet, with the Left parties now reconciled to the hike.

The Finance Minister, Mr P. Chidambaram, also indicated today that Tuesday's Cabinet meeting could take a decision on this. The Petroleum Minister, Mr Mani Shankar Aiyar, who was away on foreign tour, is reaching back tonight, in time for the Cabinet meeting.

The Left parties made another attempt to avoid a price hike in petroleum products by meeting the Prime Minister, Dr Manmohan Singh, this evening. Speaking to newspersons after the meeting, the CPI (M) General Secretary, Mr Prakash Karat, and the CPI General Secretary, Mr A.B. Bardhan, said that prices were bound to increase.

"The PM has indicated that there was no alternative than to effect the revision in the current international oil scenario," both leaders said. The Left's proposal for a hefty cut in excise duty and sales tax by the State Governments did not find favour with the Prime Minister who counter-argued that the Government was not earning any dividend as the oil companies were running losses and there was no accruals by way of income-tax either, the Left leaders said.

CPI (M) proposals: Mr Karat said that his party had submitted a six-point written note to Dr Singh, which impressed upon the Government to suspend the increase in the road cess, forego increased customs duty and forego increased excise duty among other things.

The note submitted by Mr Karat also suggested making additional crude cess available for a price stabilisation fund, review and withdraw sales tax concessions to private refineries and recover unpaid excise duty from Reliance Industries.

Mr Bardhan said that the Prime Minister has told the Left leaders that the Government had been thinking about the hike for the last two-three months. Dr Singh also told the Left leaders that the Katrina Hurricane in the US had complicated the situation further and the winter was approaching in US and European countries, which would only increase the demand for oil globally, Mr Bardhan said.

However, even though the Left parties appear to be reconciled to the hike, officially they are still opposing the decision with Mr Bardhan saying that "the Left parties did not agree with the Prime Minister's viewpoint." Simultaneously, Mr Karat added that the Left parties would protest if the hike was "more than modest."

Petrol, diesel may cost Rs 3 more: Meanwhile, indications are that petrol and diesel prices may go up by Rs 3 a litre in case the Finance Ministry does not agree to an excise duty restructuring. In case it accepts the proposal, the price increase may be in the range of Rs 2 per litre.

LPG prices are likely to be raised by Rs 20 per cylinder. However, kerosene prices are unlikely to be touched, more so because of the coming Bihar elections.

Even at this level of price increase, the woes of the oil companies are unlikely to be over as they had demanded an increase of Rs 7.50 per litre in the case of petrol, Rs 5.15 in the case of diesel, Rs 12 a litre for kerosene and Rs 96 per cylinder in the case of LPG.

Petrol and diesel prices were last raised on June 20 this year, when international oil prices were hovering in the $50-a-barrel range. Now, global prices are near $70 a barrel.

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Decision on fuel price hike likely today — PM tells Left there's no alternative

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