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| Thursday, 17 June 2004 |
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Petrol, diesel up in India by Sushma Ramachandran NEW DELHI, JUNE 15. In response to what it described as an "exceptionally critical situation" in international oil markets, the Government, Tuesday night raised the prices of petrol, diesel and liquefied petroleum gas (LPG or cooking gas) while announcing cuts in the excise duty on these critical products of mass consumption. Kerosene has been left untouched to cushion the "poor and truly needy." The petrol prices have been raised by Rs. 2 a litre, diesel by Re.1 a litre and LPG by Rs.20 a cylinder. Thus, petrol in Delhi now costs Rs. 35.71 a litre, diesel Rs. 22.74 and LPG Rs. 261 a cylinder. The prices in Chennai will be Rs. 38.96 for petrol, Rs. 25.35 for diesel and Rs. 268.10 a cylinder. Announcing the decisions, Petroleum Minister, Mani Shankar Aiyar, said the additional burden on the economy due to the rise in international oil prices since September last year was estimated at Rs. 18,000 crores annually. The burden has thus been shared by all stakeholders - the Government, the marketing companies and the consumer - with special measures taken for the vulnerable sections of society. Mr. Aiyar said the Finance Ministry tonight notified cuts in the excise duty on petrol, diesel and LPG as its share of the burden. In the case of petrol, the excise duty was down to 26 per cent from 30 per cent, diesel down to 11 from 14 per cent and LPG down to eight from 16 per cent. Regarding the burden of the `Navaratna' oil marketing companies, he said that as "socially responsible corporate entities" they had agreed to bear their share of the burden. Thus, they had not passed on the market-indicated price hikes, which would have been Rs. 3.67 to Rs. 4.91 a litre for petrol, Rs. 1.67 to Rs. 2.35 a litre for diesel and Rs. 133 a cylinder for LPG. Mr. Aiyar said a "holistic" package for the oil sector was being finalised by the Petroleum and Finance Ministries. This would include a greater flexibility for an autonomous adjustment of prices, reinforcing the sound finances of the `Navaratna' companies, sharply targeting subsidies at the "poor and the truly needy" and reinforcing measures to curtail the diversion of kerosene for adulteration and to ensure that kerosene reaches PDS outlets without delay or diversion. Asked whether the package would be unveiled in the budget, he said it was not possible to make a commitment. "In consultation with the oil marketing companies, we are working on a package of measures which we hope will provide a more enduring basis for promoting economic reforms with a human face in keeping with the letter and spirit of the common minimum programme." The present situation had occurred since the previous Government had frozen the prices of petrol and diesel since January after which the oil prices in the world had reached record highs exceeding those of even the first Gulf War. On the prospect for a decline in prices, he said there had already been some softening of prices since the OPEC meeting in early June and these were expected to fluctuate around the same levels for the next few months, barring any "exogenous political shocks." (The Hindu) |
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