India will have massive oil price hike – Manmohan tells the Communists
Sudhir Chadda
Sep. 5, 2005

India plans to have massive oil price hikes in coming days. In spite of more than 100% crude oil and natural gas price hikes, India never hikes prices within the country.

According to media sources, Prime Minister Manmohan Singh said that an increase in retail prices of fuel was ''imminent'', Communist ally of the government quoted him as saying on Monday.

A B Bardhan, general secretary of the Communist Party of India, said that Singh told him the government was helpless in the face of rising global crude oil prices and had no option but to increase retail prices of petrol and diesel.

Virtually making a case for rise in prices of petroleum products, Manmohan Singh told A B Bardhan that dividends of oil PSUs had gone down and they were making losses while the global crude prices had crossed 70 dollars a barrel.

After a 30-minute discussion with Singh on the petroleum price situation, CPI general secretary A.B. Bardhan said he had suggested lowering of excise duties and that states too should be asked to reduce duties.

“But he (Prime Minister) had a counter argument that while it was true excise earnings were going up, dividends of oil PSUs had gone down to almost zero level,” he said.

The Prime Minister also said income tax on profit of these oil PSUs had also gone down as they were making losses. “On the balance, there was nothing that the government is gaining,” Singh told Bardhan.

On the issue of asking state governments to lower the duties, the Prime Minister told the CPI leader that their Revenue Budget was also in a very bad shape.

The Prime Minister said global crude prices had crossed 70 dollars a barrel and there was no change of it declining because in the coming winter, oil consumption went up. Moreover, oil production in the US has gone down because of Katrina hurricane.

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