Left parties flay fuel price hike, to protest
CPI(M) Polit Bureau member Sitaram Yechury said the sops announced in terms of reduction in duties were not sufficient.
"Government had committed to zero duty on petroleum products when it deregulated their prices. It has not stuck to its promise. Instead, it is imposing a burden on the people.
It is completely unacceptable," he told PTI.
He said Left parties will organise nationwide protests.
Government hiked the price of diesel by Rs 3 a litre, kerosene Rs 2 a litre and cooking gas by a steep Rs 50 a cylinder to raise Rs 21,000 crores, and slashed customs and excise duties on petroleum products, sacrificing Rs 49,000 crore a year.
Oil Secretary G C Chaturvedi said the hike in price of diesel would add 0.3-0.4 per cent increase in inflation which is already hovering around 9 per cent, more than twice the rate in the US and almost four times of Germany`s.
A 14.2-kg domestic LPG cylinder now costs Rs Rs 345.35, while kerosene is priced at Rs 12.32 per litre in Delhi.
Asked about the political fallout of the hike, Reddy said, "Political problem will always be there. Economic problem will not wait for solution to political crisis."
Despite a steep hike of Rs 50 per cylinder in LPG rates, which equals Rs 50.55 increase by the then NDA government led by Atal Bihari Vajpayee government in March, 2000, domestic cooking gas will still be cheaper compared to that in the neighbouring countries.
LPG in Pakistan costs Rs 611.40 per cylinder, Rs 484 in Bangladesh, Rs 878.90 in Sri Lanka and Rs 821 in Nepal.
Similarly, the Rs 2 per litre hike in kerosene price, which comes on the back of last year`s Rs 3 per litre raise, would raise rates in Delhi to Rs 14.32 per litre, still cheaper than Rs 43.95 in Pakistan, Rs 27.81 in Bangladesh, Rs 25.12 in Sri Lanka and Rs 42.61 of Nepal.
"I am sandwiched between economist on the one hand and populist on the other. Economist will say why only Rs 2 per litre increase in kerosene, while the populist will say why did you increase by even Rs 2 per litre," Reddy said.
"Consumers can easily absorb the hikes announced today."
Asked how he managed to convince the finance ministry to forego revenues in a difficult year, he said, "I will not give you a glimpse into my kitchen. I will only serve the dishes."