Government, Left spar over fuel price hike (Lead)

June 4th, 2008 - 8:23 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, June 4 (IANS) The government Wednesday said the decision to increase the prices of petroleum products was discussed with the Left allies but the communists, terming the hike as “unjustified”, said their alternative proposals were ignored. According to Petroleum and Natural Gas Minister Murli Deora, he had talked to Communist Party of India-Marxist (CPI-M) general secretary Prakash Karat and Communist Party of India (CPI) leader Gurudas Dasgupta ahead of the price rise announcement.

“They were convinced,” Deora told reporters after announcing the decision to hike the prices of petrol by Rs.5 per litre, diesel by Rs.3 per litre and cooking gas by Rs.50 per cylinder.

However, Karat alleged that the government had not discussed the alternative proposals the Left had submitted to avoid a hike in the prices.

“The hike is unjustified. If the suggestions put forward by the Left parties are taken into account, it would be totally unnecessary,” the CPI-M said in a statement.

The government said the hike would lead to an additional earnings of Rs.211 billion.

The CPI-M observed that the state-owned oil companies - ONGC and Oil India Ltd - could have used the Rs.75 billion cess collected to create a price stabilisation fund, from which the oil marketing companies (OMCs) could be compensated.

“If excise duties on petrol and diesel are cut by Rs.3 per litre instead of Re.1 per litre as has been done presently, a further relief of around Rs.120 billion can be provided to the OMCs,” the CPI-M said.

It also asked the government to stop giving tax exemptions to large corporates.

The party added: “The astronomical figures for under-recoveries of OMCs that are being projected as their losses by the government are notional figures. They are not actual losses. The government should realise that in a global context where price of crude oil is reigning at a high level, the only sustainable solution lies in restructuring duties on petro products and having a transparent pricing policy whereby the OMCs as well as the refineries do not retain hefty profit margins.”

Earlier, the CPI-M-led Left parties, which prop Prime Minister Manmohan Singh’s government, announced a week-long protest beginning Thursday against the increase of petroleum products’ prices, alleging that the Congress-led government had not considered alternate proposals that would avoid burdening the common man.

They also asked the government to review the decision.

“This onslaught on the people comes at a time when they are suffering from the steep price rise of all essential commodities. In the background of the failure of the government to tackle the rising rate of inflation, this hike in petroleum prices will further aggravate the inflationary situation,” the four parties - the CPI-M, CPI, Forward Bloc (FB) and Revolutionary Socialist Party (RSP) - said in a joint statement.

The Left leaders were livid that the United Progressive Alliance (UPA) government ignored the alternative proposals suggested by them.

“It is to be noted that the government has refused to impose a windfall profits tax on the oil and gas extracting companies and the private oil refineries. The spectacle of these companies reaping huge profits while the common people are burdened with huge price increases will not be lost on the people,” the statement said.

The Left called for a “powerful countrywide” protest movement against the price hike from Thursday to June 11.

“The Left parties will mobilise the people to conduct ‘hartals’, strikes, picketing, rail roko (stop trains), ‘rasta roko’ (block roads) and demonstrations to register the people’s protest against this unjustified burden,” said the statement signed by general secretaries Prakash Karat (CPI-M), A.B. Bardhan (CPI), Debabrata Biswas (FB) and T.J. Chandrachoodan (RSP).

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