Meanwhile, hitting out at the ruling UPA alliance partners such as Trinamool Congress, who have denounced the hike and threatened to withdraw support from the government, a Cabinet Minister said, Mamata Banerjee was part of the Empowered Group of Ministers (EGoM) that in June of 2010 had decided to deregulate or free petrol prices.
"She (Mamata Banerjee) had not attended that EGoM meeting of June 25, 2010, but her consent was taken. She continued in the Union Cabinet after the decision was made and did not threaten even once to withdraw support," the minister said, adding that the decision to hike petrol price was in line with the empowerment that government has given to oil companies last year.
"She (Mamta Banerjee) is a compulsive populist. When we have alliance like them we don`t need opposition BJP," he added. Sources said the state-owned oil companies took the decision to hike prices on their own and were not required to consult anyone in the government.
They added that the government does not want to become unpopular, but sometimes it is forced to take unpopular decisions. "It is not that the government is running for Nobel price for unpopularity. Government does unpopular things only when it becomes inevitable." said a source.
The oil companies were forced to hike the petrol price because of the double whammy of high oil prices and the rupee`s depreciation against dollar, making imports costlier. The government sources, meanwhile, accused Mamta Banerjee and BJP of being hypocrites, saying that they were pocketing incremental revenues in states ruled by them. West Bengal has sales tax of 26 per cent ad valorem, while Congress ruled Delhi have 20 per cent VAT.
"If she (Mamata Banerjee) is so concerned why not reduce sales tax in West Bengal to Delhi levels", a source said adding that a similar story is being repeated in seven sates ruled by BJP. The central government had earlier this year cut customs duty and excise duty on both crude oil and petroleum products to sacrifice Rs 49,000 crore of revenues. There is no central tax left on the auto fuels apart from Rs 2 per litre levy for highway construction. "While BJP has accused us of midnight deceit they are perpetuating day light robbery as every time fuel prices go up states pocket gains because of ad valorem nature of local sales tax." the source said.