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"It is a damn lie to suggest that Left parties were consulted before the unprecedented fuel price hike. Even if we had been consulted we would not have given consent as already the prices of essential commodities are high," Dasgupta, a senior trade union leader and MP, said.
"We will oppose it both inside and outside the Parliament. We want immediate withdrawal of the hike," he said.
He said it would also increase the cost of agricultural products and lead to further all-round inflation.
"Petroleum Ministry is overstating the dimension of the burden of international prices on domestic oil companies. It is much less than what Mr Murli Deora (Petroleum Minister) has said," the CPI leader said.
He said the government should have lowered tax on petroleum products and the shortfall in revenue should have been taken care of by increasing the tax on the rich and super-rich.
After months of dithering, the government on Thursday finally raised petrol price by Rs 2 a litre and diesel by Re one per litre with effect from midnight on Thursday.
The Cabinet Committee on Political Affairs, which took up the matter instead of the Cabinet Committee on Economic Affairs because of the political sensitivity of the issue when general elections are not far away, however, decided against lowering duties to cushion the impact of surging international oil prices.
"Petrol and diesel prices will be increased from midnight tonight," Petroleum Minister Murli Deora told reporters in New Delhi.
The CCPA decided to raise the quantum of oil bonds to be issued to state-run oil retailers to partly compensate them for selling auto and cooking fuel below cost, he said.
Presently, 42.7 per cent of the under-realisation on petrol, diesel, LPG and kerosene is met by the government through issuance of oil bonds. This percentage has now been raised to 56-57, Petroleum Secretary M S Srinivasan said.
Government, in this financial year, will issue Indian Oil, Bharat Petroleum and Hindustan Petroleum oil bonds worth over Rs 40,212 crore at the enhanced rates.
Upstream firms like ONGC and GAIL would chip in 33 per cent (Rs 23,700 crore), while the remaining of the Rs 71,808 crore under-realisation would be borne by the retailers.
A Rs two per litre increase in petrol price would give Rs 180 crore a month additional revenue to public sector oil companies while Re one a litre hike in diesel would fetch Rs 360 crore a month.
"For the remaining part of the fiscal, we anticipate additional revenue of Rs 840 crore," Srinivasan said.
Officials said Finance Minister P Chidambaram opposed the Petroleum Ministry's demand for a Re one per litre reduction in excise duty on petrol and diesel.
The state-run firms lose Rs 10.57 per litre on petrol, Rs 11.56 on diesel, Rs 19.89 on kerosene and Rs 331 on each LPG cylinder.
Earlier, a Group of Ministers headed by External Affairs Minister Pranab Mukherjee had left a decision on fuel prices to the Cabinet after the panel was divided in the middle on the issue. Petroleum Minister Murli Deora insisted on a duty cut rather than price hike, while Finance Minister P Chidambaram was opposed to any pre-Budget duty rejig.
Petrol and diesel prices were last raised in June 2006, when crude oil was at 67 dollars a barrel. It is at 92 dollars a barrel this year. LPG prices were last raised by Rs 20 per cylinder in November 2004 when crude was at 34 dollars a barrel. Kerosene prices have not been changed since 2002 when crude was at 23 dollars per barrel.
Left parties demand roll back in petrol, diesel prices
Strongly opposing government's decision to hike the prices of petrol and diesel, Left parties on Thursday demanded its roll back and called for nationwide protests saying the move would contribute to the overall inflation which has already badly hit the common man.
"We protest this decision and will organise widespread protests against it. This hike was not necessary and should be withdrawn," CPI(M) Politburo member Sitaram Yechury said in New Delhi.
He said government's "initial idea" was to hike petrol prices by Rs 12-16, diesel prices by Rs 12, kerosene by Rs five and LPG cylinder by Rs 150 to meet the under-recoveries.
But the increase announced by the Union Cabinet on Thursday was only by Rs two for petrol and Rs one for diesel.
Maintaining that the outside supporters would demand a roll back of this hike, he said even this rise would not have been necessary if the government had restructured the ad valorem tax structure on import of petro products.
"As global oil prices rise, government's tax revenue also grows. The extra earnings of the government due to this could have been returned to the oil companies to improve their financial position. Then there would have been no need to raise the prices and burden the already burdened common man," the CPI(M) leader said.
He said since the UPA came to power four years ago, the government had decided to hike prices twice but was forced to roll back due to Left pressure.
"So the prices of petro products today stand at the same level as before the UPA came to power. It has been forced to retreat earlier. Now too, we hope that the government will reconsider its decision," Yechury said.
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RatingWho needs a foe when you have a friend like the Left Parties. All they do is oppose and organize strikes irrespective of the fact weather they are in power or an opposition. Hardly any development comes out in states ruled by them.
To hell with CPM and CPI. OPPOSITION is the only term these people know. They do not know anything about DEVELOPMENT. If they are opposing the hike in fuel prices, its just to show that they are in power. But they do not have any concern for Aam Admi. Its a gimmick.
The price hike is fully justified. The government subsidy on this has to be reduced and there should be a plan to throw it to market rates.As for reducing the tax, yes that is an option. But, instead of increasing the tax on the rich and super rich. They should decrease the allowances for the MP's
If indeed all the petro company are having financial losses, how are their share prices rising.
on this price hike left protest is right,govet need to talk with Left parties,so now not only Left parties,also BjP,IS PROTESTING
I am sorry to it is CPM,CP(I), etc that are raising fuel prices. If they were opposed then they would been the opposition. This is well known fact. They are just very good liars. Faker then the fake.Pretender one hundred percent.These communist are just scondrols, who say Aam Admi.
Left should not amke big hue and cry over the petrol price increase. Only few left dealers travel i cars and majoirty of their vadres use buses, Therefore they are least affected should not shed crocodile tears. They can keep these tears reserved to foolw the people of Bengal who unfrotunately forgot that they have given the nation Subash Chandra Bose and Tagore. How they are tolerating agents of China is unbelievable. Will the people of Bengal show some courage and setle score with CPM for thier deed of Nandigram.
Ganga Ram Churee of CPM is right that UPA has not consulted them for increase of petrol price,so why churee party's is supporting the government. Is CPM fooling himself are tryoing to fool the masses. Why CPM does not withdraw support if they are sincerely against price hike, whatever CPM should not forget that they tried to save congress in Gujrat and Himachal, but could not suvveed. Therefore it is better for CPM to save their skin by withdrawing their support to UPA and let people kick both Congress and CPM to save the nation. UPerything will be over. CPM's crocodile tears surely will go wastein W.Bengal and Kerala.
Left is not against the petrol price hike but their anger is that they have not been consulted. It is totally unfair on the part of UPA. While UPA walks with the crutches belonging to LEFT and in turn UPA hits Left with their own crutches, absolutely unfair, isn't!!!
Mr Sarin you are not right.PC is yet to be transparent in making a budget for the people as his capability is utilised suboptimally in commonpeople's interest.If he wants he can make a much better budget.Lauji is not an economist but the railways budget was an example setter.Why PC cannot do the same?
How come outside Washington, DC, USA, 87 octane petrol one can buy for US $2.80 per US Gallon (1 US gallon = 3.7854118 liters) and India has it so expensive?
Why it is $3.51 gallon in California? Could you explain please! so as in India which is another country altogether, unlike California, a state of U.S..
Due to higher State and Local taxes in CA and higher input cost (including labor). But even in CA, in smaller towns you can get it cheaper than LA and SF. Mumbai cost is higher than Delhi. These taxes are added to base price in USA. In India base price is decided by politicians rather than free and market based economy in USA.
It is well-known that oil companies in the U.S gag prices (it is illegal, but we know how they operate; by the time they take any meaningful action, these Companies and shareholders jointly loot the public) with blessings of the ruling party. I still believe that Indian Govt should control prices. if you don't buy this concept, give the American companies to operate in India. they will loot the entire India. Controls are bad but for Inida we need that.
Cheating public.. Crocodile tears... Why did they not actually stop it? If they want, they can do it.. like in the case of nuclear deal.. (Just in the case of nuclear deal, here also, it was a case of fooling the public by UPA. The international oil prices may have increased, but the cost in INDIAN RUPEES has gone down, due to low dollar value these days.. secondly, why should they not reduce the VERY HIGH TAXES on petrol, somewhere beyond 60% now?
They say they control the govt , then stage this huge drama. DO they think we belive that they did not know about this hike?? Who are they kidding?
Send these CPM scoundrels to Gulf countries or OPEC.Let them negotiate with sheik's to control the Petrol price.Don't bark and fool the nation.
At last, the UPA Government has shown some spine by taking a right decision, without consulting the Comrades. Let these comrades what they like.Kudos.
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