The Hindu Business Line : Left reconciled to small hike in petro goods prices

THE Left parties seem more or less reconciled to a marginal hike in consumer prices of petro-products even as the Government is finalising a package to mitigate the impact of the hardening international crude prices at the retail end.

An indication to this effect was given by the Communist Party India (Marxist) leader, Mr Nilotpal Basu, here today. "The whole issue of oil pricing needs some proper examination. Government has to absorb (a portion of the burden), the PSUs will also have to do something (to ease the burden on consumers). We are totally opposed to the principle of passing on the entire burden to the consumers. Government and PSUs should absorb part of it," Mr Basu said.

The oil marketing companies have been incurring losses due to the inability to recover costs from consumers in the wake of high procurement prices, in line with global product prices.

Officially, the Left Parties, which support the UPA Government from outside, have not been so far consulted on the Government's package, which is scheduled to be finalised tomorrow (June 11). The package is expected to contain a marginal hike in consumer prices; tax cuts and fixed rate of duties on crude and petro-products; a price stabilisation mechanism; and increased Government subsidy on LPG and kerosene.

The Government on Wednesday said that once the package is finalised, the Left Parties would also be consulted prior to implementation of the package. The Left Parties' position would be to minimise the extent of consumer price hike in the package. "All three issues - tax (rates), import parity pricing principle and affordability to consumers - should be looked into before firming up a pricing policy," Mr Basu said.

Of the Rs 33.71 per litre petrol price in Delhi, crude oil and the cost of refining adds up to only Rs 15.24 with the remaining Rs 18 charged from consumers on account of various duties. Similarly, in the case of diesel, which retails at Rs 21.74 per litre in Delhi, crude oil and refining cost adds up to only Rs 15.02.

If the commerciality of the oil marketing companies were to be restored from petro-product price hikes alone, petrol would require to be raised by Rs 3.53 per litre and diesel by Rs 2.25 per litre.