The international price of crude oil has fallen to $52 per barrel and the government should immediately reduce petro-product prices to pre-June 2006 levels, the CPI(M) demanded on Thursday.
As per the demand of the Left party, a key government ally, petrol prices need to be cut by Rs 2 per litre and diesel by another Rs 1 per litre.
In June, 2006, the government had allowed state-run oil marketing firms to raise petrol price by Rs 4 per litre and diesel by Rs 2 per litre, saying that global crude price had risen sharply.
On November 29, 2006, however, the government had to reduce the price of petrol by Rs 2 (and the price of diesel by Re 1) as the international price had rapidly fallen.
Before the November price cut, the Left had demanded a rollback in petro-products' price because of slide in global crude price from $71 in early 2006 to $57-58 in the six weeks leading to November.
After the price cut, the CPI(M) had welcomed the reduction of petrol price but had added that if the price of international crude oil continues to fall, the Centre should further cut petrol and diesel prices and reduce the burden on people. It had also asked the government to plan a fuel price management system.
On Thursday, the CPI(M) reiterated that demand citing a sharp slide in crude price by about $6.
"With a further fall in international prices in crude oil to around $52 per barrel, it is incumbent on the central government to immediately reduce prices of petroleum products to the pre-June 2006 levels," the Left party said in a statement.
Over the last fortnight, global crude prices have been declining because of a mild winter and rising fuel stockpiles in the United States.
Sitaram Yechury, CPI (M) politburo member, had said in November that if the slide in international crude continues, the government should naturally reduce prices further because increase in international price was the rationale given by the government when it hiked prices in the middle of last year.
"Only 50 per cent of the burden has been reduced because they had increased the prices of petrol by Rs 4 and diesel by Rs 2 in June 2006," Yechury had said.
The Left parties had raised the issue of reduction at several UPA-Left Coordination Committee meetings but the two parties had failed to reach a consensus.
The UPA, in fact, had said then that there was no question of reducing prices as the crude price is volatile because of the speculative nature of the market and there was a possibility of an increase in demand in the winter.