Hike in fuel prices will not affect consumers much Petroleum Minister (28-Jul-2010)
According to the Petroleum and Natural Gas Minister, Murli Deora the recent hike in the prices of domestic liquefied petroleum gas (LPG) and kerosene is “not that high†and the repercussions of the increase is “minimal†on the consumers at large. He re-iterated the stance of government and attributed the increase in fuel price to fiscal consolidation of the country.
Talking about the impact of price hike on the household consumers he elucidated further that, the increase of Rs 35 on the cooking gas will increase the spending to Re 1 per day for the consumption of a LPG cylinder a month. Whereas the kerosene which got costlier by Rs 3, will increase the spending just by Rs 0.50 per day if a household uses 5 litre of kerosene a month. He also iterated that the rise in the kerosene price was the need of the hour because it had remained unchanged for more than half a decade and also to prevent its illegal usage as an adulterant in diesel.
Affirming the decision on fuel price hike the minister explained that the action was necessary for the purpose of improving the financial health of the oil marketing companies. Responding to the allegations of some CPM leaders who said that the oil marketing companies are sitting on profits, Deora said that Indian Oil Corporation (IOC) has booked losses and defended the other oil PSUs by stating that they are in expansion stage as they are setting up new refineries across the country and undertaking new projects abroad as well.
Murli Deora maintained that the pricing reforms will result in consolidation and the government will mitigate the adverse effects of de-regulation in case of their occurrence. In conformity with the Congress strategy, he passed on the blame of the fuel price rise on the state governments. Sighting the taxes leveled by several states he said that the sales tax on petrol and diesel by some states was as high as 33% and 24.7% while some states use to levy 12.5 % sales tax on kerosene.
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