Fuel price hike draws closer
There seems to be no further escape for the consumers of auto and cooking fuels. An across-the-board hike in the prices of petrol, diesel and cooking gas seems to be just round the corner. HT reports.business Updated: May 08, 2012 23:11 IST
There seems to be no further escape for the consumers of auto and cooking fuels. An across-the-board hike in the prices of petrol, diesel and cooking gas seems to be just round the corner.
The only good news is that to reduce the burden of this fuel price hike on the consumers - necessitated in the wake of high global oil prices and growing losses of state-owned oil companies - the Centre has asked state governments to pitch in and reduce taxes on fuel in the manner done in Goa recently.
Sending out a strong message to all political parties including United Progressive Alliance (UPA) allies and the opposition, finance minister Pranab Mukherjee made it clear on Tuesday that the Central government alone cannot address the burgeoning fuel subsidy.
Replying to the debate on the Finance Bill, Mukherjee hinted that the time has come for all parties to bite the bullet and share the burden.
"Coalition consensus is necessary for reforms and all stake holders should come together for development," he said.
States need to cut ad valorem taxes on fuels, the minister said. BJP-ruled Goa is the first state to have done so on its own.
The companies reacted with scepticism. "We have been hearing this intention of the government for a long time," said a senior official at Indian Oil Corporation. "We are awaiting concrete action on states pitching in by reducing taxes."
Mukherjee hinted that oil imports will become difficult if crude touches $150 per barrel.
The government controls the prices of diesel, domestic LPG and kerosene. Oil companies lose Rs. 14 a litre on diesel, Rs. 32.59 per litre on kerosene and Rs. 480 per cylinder of LPG.