Gujarat industry opposes fuel price hikes

June 5th, 2008 - 3:27 pm ICT by IANS  


Ahmedabad, June 5 (IANS) The latest fuel price hikes will result in a Rs.18.45 billion burden on Gujarat, apart from taking inflation to double digits, the Gujarat Chamber of Commerce & Industry has said. Senior chamber official Bipin Patel told IANS here Thursday that taxes on fuel - at 26 percent on petrol and 24 percent on diesel - were already high in Gujarat. Petrol would now cost Rs.6.50 more, touching nearly Rs.57 per litre.

The central government could have graded the hike by a rupee or two every month, he suggested, as the immediate impact on the transport sector would push up prices of essential commodities. He wanted the centre to now pressurise states such as Gujarat to put the brakes on high sales tax. “No state will cut sales tax on its own,” he said.

Patel said there are ways to tackle the international crude price hike, like keeping vehicles off the roads for a day, or better still, using solar energy to run cars.

State government spokesperson and Energy Minister Saurabh Patel put the blame squarely on the centre. “The UPA government’s move is due to a directionless policy,” he said. “It imposes a burden of Rs 1,400 crore (Rs.14 billion) on the state with farmers having to bear a burden of Rs.175 crore (Rs.1.75 billion).”

Meanwhile, a cross-section of the people IANS spoke to were upset over the fuel price hike Wednesday that saw petrol price up by Rs.5 per litre, diesel by Rs.3 and cooking gas by Rs.50 per cylinder.

“I am ruing the day I voted for the Congress; I feel cheated now by what it had said, ‘Congress ka haath, aam admi ke saath, (The Congress is with the common man),’” said Govindbhai, who runs a small auto garage here. With petrol and diesel prices already high and cooking gas now dearer, “will the poor survive?” he asked.

“Why does the government always tinker with a sensitive commodity like petrol?” asked computer operator S. Pantulu, who works in a private firm here.

A Torrent Power official had a solution: shelve the proposal to waive off the Rs.710 billion farm loans, and use this amount to shore up the bottomline of oil companies. “It would have been better if Congress Party funds were used for the waiver,” he said on condition of anonymity.

Social activist Himmat Shah said belt-tightening measures were called for. He recalled Lal Bahadur Shastri who refused to eat rice on Mondays and had urged the people to follow suit to save the scarce commodity petroleum.

He also suggested mass production of bicycles without a single rupee as tax. Once a week bicycle should be used by everyone, he said.

Shah called for a surcharge on cars to create an infrastructure fund to develop an underground metro rail system. A car costing between Rs.200,000 and Rs.500,000 should be taxed Rs.50,000, while those above it should be taxed Rs.100,000, he said. “The underground rail is the only way forward.”

For retired central government official Y.R. Iyer, the government has lost credibility. “When international crude prices fall, the government keeps quiet. Even otherwise petrol is so heavily taxed that in a litre one pays two-thirds as tax,” he said.

Undergraduate Mithun Roy referred to a UPA spokesperson touting the Rs.5 increase in petrol price as “modest”, and asked: “Petrol has crossed the dangerous Rs.50 mark. Will the Rs.5 hike not be the last straw that broke the camel’s back?”

“I am shocked by the Rs.50 hike on cooking gas,” said Manisha Patel, who has a family of four to maintain. “The Congress will pay for it.”

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