People's Democracy

‘Reduce Petro Prices To The Pre-June, 2006 Level’

Karat Writes To PM

The following is the text of the letter dated November 2, 2006 addressed by CPI(M) general secretary Prakash Karat to prime minister Dr Manmohan Singh calling for a review in the prices of petroleum products. 

KINDLY refer to my letter dated June 5, 2006 expressing concern over government’s decision to increase the price of petrol and diesel which was effected subsequently in June 2006.

I strongly feel that the price hike should be reviewed again in the light of recent developments. As you are kindly aware that international crude price which had reached a peak of 71 dollar/barrel in May 2006, is now hovering around 57 to 58 dollar/barrel. This is comparable to the average crude price of 55 to 56 dollar/barrel in 2005. Concurrently, the reported proposal by petroleum ministry to finance ministry for reduction of excise duty by Re 1/litre on petrol and diesel, is a welcome step towards rationalisation of tax/duty structure of petroleum products to reduce the burden on the consumer.

As for the oil PSUs, the high dividend of Rs 6417 crore paid by ONGC and Rs 1460 crore paid by IOC to the government is reassuring in the context of their financial health. As a matter of fact, I understand that even the lowest profit-making oil marketing company like BPCL has also paid a handsome performance/profit linked incentive to its senior executives and others for the year 2005-2006.

In view of the above, coupled with the fact that the price of ATF has already been reduced by 8 per cent, I hope you will take necessary steps to reduce the price of diesel and petrol to the pre-June, 2006 level. (INN)