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Petroleum Minister Mr. Murli Deora has termed Bandh call given by Opposition Parties totally unjustified in view of the minimal impact of recent price rise on the common man. He said this is nothing more than misleading the people as these Parties have been instrumental in notifying the deregulation of the prices of petroleum products and reducing subsidies in November1997 and in implementing the programme from April 2002. Therefore Bandh call is not only unjustified but also against the interest common man and poor people/ daily wage earners who could be deprived of their wages, besides causing inconvenience to the public at large.

Shri Deora also reiterated that increased price of Kerosene by Rs 3 per liter which translates into an increase of only 50 paisa per day per family. The price increase of Domestic LPG by Rs 35 per cylinder means an increase of less than Rupee 1 per day per family. The impact of increase on the common man who uses LPG and Kerosene as domestic fuels is negligible. The Government recently decontrolled the prices of Petrol and Diesel. This resulted in an increase of Rs 3.50 per liter in the price of Petrol. However Public Sector Oil Marketing Companies (OMCs) increased the price of Diesel Rs. 2 per liter only and are still bearing the under recovery of more than Rs. 1.50 per liter in the interest of the consumers who comprises of farmers, transporters and industry.

Referring to the statement of Chief Economic Advisor to the Government of India, the Minister stated that that the recent price increase in four petroleum products will have marginal impact on the rate of inflation. Shri Deora explained that while during NDA regime the price of Kerosene was raised from about Rs 2 per liter to Rs 9 per liter whereas during UPA regime there was no increase in the price of Kerosene during last six years and now the price has been marginally increased from Rs 9 per liter to Rs 12 per liter.

He also informed that when prices of crude in the international market touched the all time high of US$ 142 per barrel in July, 2008 then also the Government did not pass the entire burden to the consumers and in process government and the Public Sector Oil companies had to bear under recoveries of more than Rs 1 lakh crore. However as soon the prices of crude came down, the Government immediately restored the prices of Petrol and Diesel in December, 2008 and January, 2009 to benefit the consumers. The price of Petrol in June, 2006 was Rs 47.51 per liter and this was Rs 47.93 per liter as on 24th June, 2010 i.e. just before the decontrolling the prices of Petrol on 25th June, 2010. Even after the recent increase in the prices, there will still be the under recovery of Rs. 53,000 crore which the Government and OMCs will have to bear during 2010-11.

In view of the fact that the contribution to state exchequer from taxes on Petroleum products is the highest, Petroleum Minister has asked the state government that the incremental increase in the revenue of the state government due to recent increase in prices of these products should be rationalized so as to benefit the consumers. He specifically pointed out the case of Bihar where the government is levying the VAT of 12.5 % on PDS Kerosene which is considered to be poor man’s fuel thereby putting extra burden on the common man.

RCJ/ Deora on Bandh Call
(Release ID :63018)