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Pranab urges state govts to cut levies on petro products

Posted by on June 27, 2011 0 Comment

New Delhi: Union Finance Minister Pranab Mukherjee on Monday urged the state governments to reduce levies on diesel, kerosene and domestic LPG in line with the duty cuts undertaken by the Central government, to provide some relief to the common man.

In a letter to the Chief Ministers of all the states, Mr Mukherjee sought their cooperation in this regard.

The Union Finance Minister stated in his letter that even though the crude oil prices in the international market have been ruling at a very high level over the last six months, the Central government had maintained a firm control over the prices of diesel, kerosene and domestic LPG at the retail level to protect the common man.

Mr Mukherjee, in his letter stated that this however, has led to losses of the state owned Oil Marketing Companies (OMCs) spiralling out of control with the OMCs losing more than Rs 450 crore per day due to the significant difference between India’s domestic prices and the international prices.

This concern has necessitated some revision in the administered prices, he pointed out.

The Union Finance Minister said that in raising the retail prices of diesel, LPG, and kerosene, the Centre “has been conscious of the burden on the common man, and therefore, the price hike has been minimal.”

He added that even though the Central government has been under compulsion to maintain its fiscal and budgetary resource management targets and find additional resources to finance various welfare schemes, it has sacrificed its revenues from the oil sector on account of customs and excise duty in order to minimize the impact on the common man.

Mr Mukherjee noted that the Central government will have to allocate significant resources as subsidies to the OMCs, so as to ensure their financial survival.(INN)

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