Reduce tax on petroleum products: Cong to party-ruled states | delhi | Hindustan Times
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Reduce tax on petroleum products: Cong to party-ruled states

delhi Updated: Jun 25, 2011 20:37 IST

Under attack from the Left and the right over fuel price hike, Congress on Saturday asked party-ruled states to reduce taxes on petroleum products to give a repreive to the common man.

Hailing the decision of the Centre to reduce custom and excise duty on the petroleum products as a "step for giving relief" to common man, party general secretary Janardan Dwivedi appealed to states to announce similar measures to give a reprieve to people.

"The Centre has tried to give relief by reducing the custom duty. Likewise all state governments can reduce their taxes according to their financial capacity. As far as Congress-ruled states are concerned, we are asking them to do it as far as possible," Dwivedi told reporters.

Senior party leaders, speaking on the condition of anonymity, said that some announcements in this regard are likely on Saturday night by Congress-ruled states.

Talking to reporters at the AICC, Dwivedi, at the same time justified the government's decision to hike fuel prices citing compulsions and dismissed BJP's criticism on the issue, reminding that prices of oil were increased many times during the NDA rule.

He also cited examples of other countries in the region where the prices of diesel, LPG and kerosene are much higher than in India.

"There are times when you are compelled to take hard decisions. There is no doubt that when the prices of diesel go up, everybody feels the pinch. But if you see all the facts you will realize that there was no other option," Dwivedi said.

In a steep hike, the government on Friday increased diesel price by Rs 3 per litre, domestic LPG by Rs 50 per cylinder and kerosene by Rs 2 per litre and slashed customs and excise duties on crude oil and products, sacrificing Rs 49,000 crores in revenues.

The decision has evoked sharp criticism from the Left and BJP. Dwivedi, however, said that the hike in fuel prices did not take place only during Congress' rule.

"You will be surprised to know how many times, the price of oil was increased during NDA's period," he said.

Dwivedi noted that 84% of the country's total oil requirement is imported and added that the government's decision to reduce excise and custom taxes will still cause a revenue loss of Rs 49,000 crore to the exchequer.

"A logic is given that hike in diesel price will lead to all round price rise but we have to take in account this fact also that after all who have to share the burden of subsidies. Subsidies also escalate inflation," he said.

Citing the prices of LPG, kerosene oil and diesel in neighbouring countries Pakistan, Sri Lanka, Nepal and Bangladesh, Dwivedi said the prices of all three items are much lower in India.