New tax proposed to tide over fuel price crisisMay 27th, 2008 - 2:23 pm ICT by admin
New Delhi, May 27 (IANS) A surcharge on income tax is among the proposals being considered by the government to help bail out oil marketing firms reeling under high cost of crude oil but still having to hold back prices of transport and cooking fuels. The proposal was discussed at a meeting between Petroleum Minister Murli Deora and Finance Minister P. Chidambaram Tuesday after the move to hike fuel prices was seen as politically explosive and unacceptable to several parties within the ruling coalition.
“We discussed so many options available. Nothing has been decided,” Deora told reporters after the meeting here.
“Hopefully, a decision will be taken soon,” he said, even as estimates put the revenue loss at Rs.200 billion ($5 billion) for this fiscal due to keeping the prices of cooking and transport fuels artificially.
According to oil ministry sources, another option put forward to the finance ministry was a cut in import tariff on crude oil and excise duty on transport and cooking fuels, but this proposal was summarily rejected by Chidambaram.
The petroleum ministry had also proposed to raise petrol prices by Rs.10 a litre, diesel by Rs.5 per litre and that of cooking fuel Rs.50 per cylinder to cut losses being incurred by three state-run firms - Indian Oil, Bharat Petroleum and Hindustan Petroleum.
But the Left parties that prop the United Progressive Alliance (UPA) government have categorically said they will oppose any move to hike prices of transport and cooking fuels since the average citizen is already burdened by high inflation.
“There is no question of accepting any hike in the fuel prices,” Communist Party of India-Marxist (CPI-M) general secretary Prakash Karat had told reporters over the weekend, soon after the proposal was mooted by the government.
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