People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)

Vol. XXIX

No. 38

September 18, 2005

Mr Prime Minister, Please Clarify

CPI(M) MP On Petro Hike

 

CPI(M) MP, Dipankar Mukherjee, has sent the following letter to prime minister Dr Manmohan Singh on  September 12 regarding the recent petro price hike:

 

I INVITE your kind attention to the statement made by the union minister of petroleum and natural gas in Rajya Sabha on August 23, 2005 regarding the status of implementation of recommendation No. 12 of the first report of the standing committee on petroleum and natural gas, which is annexed herewith.

 

Acceptance of the recommendation regarding utilisation of cess, which is estimated to be Rs 5400 crore for this year, meets the amount of shortfall of Rs 5000 crore sought to be raised through price hike of petrol and diesel. Under the circumstances, the price hike is totally avoidable in view of the government’s assurance of utilisation of the cess towards subsidy burden.

 

I shall be grateful if the government’s decision on this issue is clarified so that the parliament is appraised of the factual position.

 

Annexure

Statement showing Action Taken Report on the Recommendation/Observations contained in the First Report of Standing Committee on Demands for Grants 2004-05 of Ministry/Department of Petroleum & National Gas

 

Recommend-ation No.

Recommendation

Action Taken by

Government

Whether accepted or not by government

12

A price stabilisation fund should be created to bring stabilisation in prices of petroleum products by using money collected from cess on crude oil to act as cushion in case of reduction in import duty/excise duty on LPG, Kerosene, Petrol and diesel and to provide subsidy on LPG and Kerosene.

The price band mechanism for petrol and diesel has an inbuilt mechanism to allow variations in product prices in tandem with import parity. As such no price stabilisation fund is considered necessary for petrol and diesel. This ministry is in agreement with recommendation of the Committee that cess collected under OIDB Act should be used to meet balance subsidy requirement after taking into account the budgeted subsidy which is presently being borne by Oil PSUs.

Not accepted, in respect of prices stabilisation fund.

 

 

 

 

 

Accepted the recommendation regarding utilisation of cess towards subsidy burden.

(INN)