Opposition cries foul as Deora promises fuel price cut (Roundup)

November 25th, 2008 - 8:40 pm ICT by IANS  

New Delhi, Nov 25 (IANS) The government will allow oil marketing companies to cut prices after the end of the assembly elections next month, Petroleum Minister Murli Deora said Tuesday, prompting the opposition to term the announcement a violation of the Election Commission’s code of conduct.”We have to reduce oil prices after the assembly elections end,” Deora told reporters on the margins of a conference on hydrocarbons.

Petroleum Secretary R.S. Pandey, who also participated at the conference with representatives from Central Asia’s oil industry, said the cabinet would decide the quantum of the reduction.

According to Pandey, oil marketing companies had incurred huge losses earlier in the year, which would have to be taken into consideration while deciding the reduction.

He said under-recoveries for the current fiscal were about Rs.1,100 billion (Rs.1.1 lakh crore).

Deora’s announcement triggered strong reactions among the opposition Bharatiya Janata party (BJP). “This is a violation of the model code of conduct aimed at wooing the voters ahead of the assembly elections in many states,” senior BJP leader and party’s chief ministerial candidate in Delhi V.K. Malhotra told reporters.

The Congress brushed off the charge, with party leader M. Veerappa Moily wondering if the BJP did not want a reduction in fuel prices.

“For the sake of the people we are prepared to face anything. We have not committed any offence,” Moily said, though he added that the announcement should have come earlier.

The petroleum minister had cited the consistent and sharp fall in global prices for the proposed cut.

“The international prices have fallen from $147 to $50 and there is an expectation that prices need to be reduced. I am also of the opinion that they should be reduced and that will happen after December 24,” said Deora.

The Left, meanwhile, felt that the price cut had to be immediate, threatening an agitation if the centre failed to slash prices by Nov 30.

“If the union government fails to comply with our demand, a series of protests would be launched across the state (Uttar Pradesh),” senior Ccommunist Party of India (CPI) leader Ashok Mishra told reporters at a press conference in Lucknow Tuesday.

In another development, Deora said Reliance Industries has approached the government for re-opening some of its retail outlets. Essar, too, has started work to re-open 500 outlets, he added.

Later inaugurating the conference, Deroa said there had to be a greater transparency in formulation of oil price so that a “healthy market could be put in place”.

“Greater stability in oil prices will also ensure that there is enough long-term investment in the sector so that access to oil is not restricted,” he asserted.

The government raised prices in June, when the international oil prices were about $130. Since then, global crude prices have fallen consistently, but the ministry did not cut fuel prices, saying that a depreceating rupee was also eroding away the gains from falling international crude rates.

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