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Govt starts talks; CPI opposes oil price hike

UPA ally CPI today cautioned against any hike in prices of petroleum products at the very outset of the consultation process started by the government.

india Updated: May 09, 2006 20:03 IST

UPA ally CPI on Tuesday cautioned against any hike in prices of petroleum products at the very outset of the consultation process started by the government with the Left allies in the face of shooting international oil prices.

Stating that any hike in domestic prices of petroleum products would be "inflationary", CPI leader in Lok Sabha Gurudas Dasgupta said the government should instead consider reducing excise and custom levies.

"Any hike in petroleum prices will have inflationary effect on the economy," he said after meeting Deora in New Delhi.

Deora, who was against any increase in the prices of cooking gas and kerosene said, the government has started the consultation process in the face of surge in global crude prices, which are hovering over the $70 a barrel mark.

The minister, who also met Delhi Chief Minister Sheila Dikshit earlier in the day, said, "It will be our endeavour not to hike prices particularly of cooking gas and kerosene as these are used by poor strata of the society and common man."

He said they were working on "some alternatives, including equitable distribution among stakeholders", but did not elaborate.

The minister would meet Left parties again on Wednesday, while Petroleum Secretary MS Srinivasan would meet his counterpart in Finance Ministry Adarsh Kishore later to chalk out a way to reduce the Rs 75,000 crore under-recoveries that oil marketing companies are estimated to suffer in 2006-07.

On cards is a Rs 2-3 per litre hike in petrol and diesel prices and Rs 15-20 increase per LPG cylinder, but a decision would be taken only after consultations with UPA allies.

First Published: May 09, 2006 20:03 IST