Petroleum Minister Murli Deora on Sunday termed the Bandh call given by 17 Opposition Parties as totally unjustified.In a statement, Deora said, the hike has minimal impact on price rise. He said opposition parties were misleading the people as these parties have been instrumental in notifying the deregulation of the prices of petroleum products and reducing subsidies in November1997 and in implementing the programme from April 2002.
Deora said increased price of Kerosene by Rs 3 per litre which translates into an increase of only 50 paisa per day per family. The price increase of Domestic LPG by Rs 35 per cylinder means an increase of less than Rupee 1 per day per family. The impact of increase on the common man who uses LPG and Kerosene as domestic fuels is negligible, he said.
The Government recently decontrolled the prices of Petrol and Diesel. This resulted in an increase of Rs 3.50 per litre in the price of Petrol. However Public Sector Oil Marketing Companies (OMCs) increased the price of Diesel Rs. 2 per litre only and are still bearing the under recovery of more than Rs. 1.50 per litre in the interest of the consumers who compris farmers, transporters and industry, Deora said.
Referring to the statement of Chief Economic Advisor to the Government of India, Deora said the recent price increase in four petroleum products will have marginal impact on the rate of inflation.
Deora explained that while during NDA regime the price of Kerosene was raised from about Rs 2 per litre to Rs 9 per litre, during UPA regime there was no increase in the price of Kerosene during last six years and now the price has been marginally increased from Rs 9 per litre to Rs 12 per litre.
He said, when prices of crude in the international market touched the all time high of US$ 142 per barrel in July, 2008, the govt at that time did not pass the entire burden to the consumers and in process government and the Public Sector Oil companies had to bear under recoveries of more than Rs 1 lakh crore. However as soon the prices of crude came down, the Government immediately restored the prices of Petrol and Diesel in December, 2008 and January, 2009 to benefit the consumers. The price of Petrol in June, 2006 was Rs 47.51 per liter and this was Rs 47.93 per liter as on 24th June, 2010 i.e. just before the decontrolling the prices of Petrol on 25th June, 2010. Even after the recent increase in the prices, there will still be the under recovery of Rs. 53,000 crore which the Government and OMCs will have to bear during 2010-11, he said.
In view of the fact that the contribution to state exchequer from taxes on Petroleum products is the highest, Petroleum Minister has asked the state government that the incremental increase in the revenue of the state government due to recent increase in prices of these products should be rationalized so as to benefit the consumers.
He specifically pointed out the case of Bihar where the government is levying the VAT of 12.5 % on PDS Kerosene which is considered to be poor man's fuel thereby putting extra burden on the common man.
