Left Parties Divided On Petroleum Price Hike

The CPI(M) remains opposed to any hikes in the prices of petroleum products, even though the oil pool deficit account is increasing. The party wants the government to initiate other measures to reduce the oil poll account deficit instead.

However, CPI leaders appear to be reconciled to the inevitability of increasing petroleum prices. A senior CPI leader said that his party was not opposed to the hike per se.

We had argued at the steering committee meeting that, since the price situation is already alarming, any hike in prices of petroleum products will further push prices up. Hence, it should not be attempted now, he explained. But if there was no option, he indicated, the party would go along after registering its opposition for the record.

Since it is the CPI that has representatives in the Union cabinet, even some CPI(M) leaders acknowledge that their opposition may not prevent the hikes much longer. They say that the hikes may be announced during or just after the Union budget.

It was at the instance of the Left parties that a decision on the issue was deferred at two steering committee meetings of the United Front.

CPI(M) politbureau member S Ramachandran Pillai told Business Standard yesterday that his partys stand would not change. He blamed the entire approach of the government for causing the critical financial situation and said that no efforts were made for alternate resource mobilisation.

He spoke of such novel solutions to the problem as a check on the number of vehicles.

Pillai also criticised the government for raising the issue price of wheat, which he said would benefit the richer peasantry. Instead of expanding irrigation facilities, power and other benefits, which will benefit the entire peasantry, the government has gone for this, Pillai said.

Left leaders, including those of the CPI(M), admit that a hike in the price of levy sugar has become inevitable, particualarly after the Supreme Courts recent directive to that effect.

The Supreme Court on Wednesday directed the government to refix the price of levy sugar, taking into account additional cane price paid by the industry to farmers under the sugar control order from 1974-75 to 1979-80.

The government has borne a Rs 1,000 subsidy for sugar since October 1995.

The union cabinet last week cleared an increase in the price of levy sugar from Rs 9.05 to Rs 10.50 but the decision will come into effect only after the core group of senior UF leaders clears it. The core group is likely to meet on February 9, immediately after the Punjab assembly elections.

At last weeks cabinet meeting, officials had recommended a hike to Rs 11, to neutralise the increased cost to the exchequer for this seasons procurement. However, a number of ministers insisted that the price be raised to no more than Rs 10.50, and that even this be done only if the core group agreed.

The also urged that stern steps be taken by various departments and through state governments to bring down prices, particularly of food grain. Some UF constituents hold that food prices must be controlled before the petroleum prices are hiked.