Opposition, allies flay petrol price hike
Wednesday May 23, 2012 10:51:36 PM,
IANS
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New Delhi:
India Wednesday hiked petrol prices by an unprecedented over Rs.7
a litre, triggering protests from the opposition and even
government allies. But the industry hailed it.
Just a day after Prime Minister Manmohan Singh warned of taking
"difficult decisions" to mobilise revenue, state-controlled
refiners hiked the fuel price by Rs.6.28 a litre exclusive of
taxes effective midnight Wednesday.
This, an official said, was meant to compensate losses incurred by
the companies for selling petrol at subsidised rates.
The hike will range between Rs.7.54 and Rs.7.98 in the four metros
and would be higher or lower in other cities depending on the
extent of taxes.
India Inc said the increase had become inevitable with the
continued slide of the rupee's exchange rate.
"The inflationary impact of such an increase is ... transitory. It
can be mitigated by reduction in taxes by the central and state
governments," the Federation of Indian Chambers of Commerce and
Industry said.
Indian Oil Corporation said given the losses being incurred, it
was forced to hike the price of petrol.
"This excludes losses already suffered till date during current
financial year 2012-13, which would require an additional increase
of around Rs.1.50 a litre in selling price of motor spirit for
balance part of the year," it said.
Petrol in Delhi will cost Rs.73.18 a litre, in Mumbai Rs.78.57, in
Kolkata Rs.77.88 and in Chennai Rs.77.53 a litre.
A defensive Congress took refuge in the high global prices of oil.
"Global prices are up and the oil companies take their own
decisions after the deregulation of petrol prices. India is part
of the world and so it is affected too," said Congress
spokesperson Rashid Alvi.
The middle class reacted with predictable anger. The opposition
tore through the official justification of the price rise while
allies DMK and Trinamool Congress too flayed the Congress-led
government.
But even as she attacked the Congress for not consulting the
allies over the issue and expressed her opposition to the price
rise, Trinamool leader and West Bengal Chief Minister Mamata
Banerjee refused to quit the UPA.
Both DMK chief M. Karunanidhi and Punjab Chief Minister Parkash
Singh Badal demanded an immediate rollback, saying the hike would
badly hurt the common man.
The CPI-M and other Left parties were the most critical.
D. Raja of the Communist Party of India said: "It is just a
prelude. It will burden the common people and we will protest on
the streets and the government will have to rollback the hike."
Corporate Affairs Minister M. Veerappa Moily justified the
decision, pointing out at the fiscal deficit and an economic
situation "going out of hand". He said the price rise was "most
minimal".
The Bharatiya Janata Party blamed fiscal mismanagement for the
decision. Tamil Nadu Chief Minister J. Jayalalitha mockingly
called it a "gift" from the UPA-II government on its third
anniversary.
Indian states levy sales tax of 15-33 percent. Among the other
levies are VAT and additional sales tax.
India deregulated petrol prices in June 2010 but continues to
subsidise kerosene, diesel and cooking gas to protect the poor
from inflationary pressures.
Petrol prices were last revised Nov 4, 2011.
The oil companies have been losing Rs.8,000 crore per annum as
they were being forced to sell petrol at subsidised rates.
Petroleum and Natural Gas Minister S. Jaipal Reddy had said
Tuesday the depreciation of the rupee had necessitated an
immediate increase in fuel prices.
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