Andhra Pradesh announces relief, no hike in LPG prices (Lead)

June 6th, 2008 - 12:34 am ICT by IANS  

A file-photo of Sonia Gandhi

Hyderabad, June 5 (IANS) Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy Thursday announced his government would bear the burden of the fuel price hike and LPG would be continued to be sold at earlier prices. The state is also likely to reduce sales tax on petrol and diesel. “More than 1 crore 5 lakh (10.05 million) women use cooking gas in the state. While the price hike by the centre was inevitable, I don’t want to see my mothers and sisters suffer due to this hike. The state government will pay the revised price so that they don’t have to bear the burden,” Reddy said in a meeting in Guntur amid loud cheers from the crowds.

The central government Wednesday announced a hike of Rs.50 per LPG cylinder, which would have hiked the prices of cooking gas to Rs.354.42. It will now remain at the old price of Rs.302.88.

The price of petrol and diesel went up by Rs.5 and Rs.3 respectively.

The state government’s move came amid strong protests against the hike in prices. It is also significant as the state is going to polls next year.

The announcement by the chief minister came hours after Congress president Sonia Gandhi asked party ruled states to slash taxes on petroleum products to minimize the impact of the hike on the common man.

A cabinet meeting is likely Friday to take a decision in this regard. Finance Minister K. Rosaiah told reporters here Thursday that a decision would be taken after the chief minister returned to the state capital from Guntur district.

“It is a major issue. It has to be discussed in the cabinet before we take a decision,” said Rosaiah.

He agreed that the hike in petroleum prices was tough on the common man.

Expressing serious concern over the hike, the chief minister Wednesday appealed to the central government to reduce the price as far as possible. He said the hike would hit the common man and he would take up the issue with Prime Minister Manmohan Singh.

States like West Bengal, Bihar, Maharashtra and Kerala have already announced they would slash taxes.

The price hike has been steep in Andhra Pradesh as the rate of sales tax on petrol here is the highest in the country. The state levies 33 percent tax on petrol and 22.25 percent on diesel. The tax on cooking gas is four percent.

The government earned Rs.18 on every litre of petrol at the old rate of Rs.51.10. The revised price is Rs.56.65. The new price of diesel is Rs.38.25 against the old price of Rs.34.98 per litre.

The government earns Rs.45 billion from sales tax on petroleum products. This is the single largest revenue earner for the state, which has a total annual revenue of Rs.203 billion.

The government recently lowered the sales tax on aviation fuel from 33 percent to four percent. Officials said this was done as the volume of trade was low.

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