Under fire for the hike in fuel prices, the Congress on Saturday directed party-ruled states to reduce taxes on petroleum products to give some relief to the common man.
The government's decision on Friday to increase the prices of diesel by Rs 3 per litre, domestic LPG by Rs 50 per cylinder and kerosene by Rs 2 per litre evoked sharp criticism from the BJP, the Left and its own key allies, the Trinamool Congress and Nationalist Congress Party (NCP).
"I am pained at such a decision by the Centre…this has hurt me very much," said West Bengal chief minister Mamata Banerjee.
In a move to offer some relief to consumers, Banerjee decided to withdraw the cess of Rs 16 per domestic LPG cylinder, effectively reducing the burden to Rs 34, and entailing a loss of Rs 75 crore to the state exchequer. This will be mopped up from other sources of income, she said.
For its part, the Congress defended the Centre's decision. "There are times when you are compelled to take hard decisions. If you see all the facts you will realise that there was no option," said party general secretary Janardan Dwivedi said.
The Centre has tried to give relief to consumers by reducing customs duty, he added. "Likewise, all state governments can reduce their taxes."
An announcement in this regard is expected late tonight.
The hike has given a fresh handle to opposition parties to attack the scam-battered UPA. BJP and the Left parties have hit the streets to put pressure on the government to announce a rollback.
Asked whether the BJP would follow the Congress in instructing party ruled stated to reduce the cess, BJP chief spokesperson Ravi Shankar Prasad said: "The centre has messed up the economy and failed to control the inflation. Non-UPA state governments anyway face discrimination, and it is Congress governments that impose a high cess."