NEW DELHI, JUNE 5 : Last month, Petroleum Minister Murli Deora wrote to Prime Minister opposing any increase in prices of petroleum products as it would go against the UPA government’s promise to protect the common man. Today, he joined his Cabinet colleagues in approving a hefty hike in price of petrol-at Rs 4 a litre, it’s the highest-and a jump of Rs 2 per litre in diesel. These changes are effective midnight Monday.
The increase, said Deora, was as minimum as possible. “We have tried to put as minimum burden as possible on the consumers and stuck to our commitment of not increasing prices of LPG and kerosene,” Deora told the media, ruling out the possibility of a rollback.
“How much have we increased? How much can we roll back?” questioned Deora. “I hope they (the Left) will look at this and continue to support the government,” he said, adding that the measures would save Navratna oil firms .
Reacting quickly, the Congress and Left called the hike “anti-people” and demanded a rollback while the BJP and Left trade unions announced a nationwide stir against it.
The Left today sent an alternative package-similar to the one Deora suggested last month-seeking cut in excise duties to offset the burden arising out of spiralling crude prices and resultant subsidies.
Along with the price hike, the Cabinet also approved a package-suggested by the Rangarajan Committee-comprising cut in customs duties on petrol and diesel, and a shift in product pricing method from import parity to trade parity that reduces the price that marketing companies pay to the refineries.
Much against Finance Minister P Chidambaram’s wishes, it also okayed the issuance of oil bonds to bridge the Rs 73,500-crore deficit arising from surging global oil prices.
Upstream firms like ONGC, GAIL and Oil India will chip in Rs 24,000 crore by way of discount on crude oil, LPG and kerosene they sell to oil retailers and stand-alone refiners.
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