Tamil Nadu CM asks Centre to withdraw dual pricing for diesel

Would approach SC if request is not accepted, says Jayalalithaa

Tamil Nadu Chief Minister J Jayalalithaa has today requested the Prime Minister to immediately withdraw the "ill-conceived, ill-timed decision" of diesel price deregulation and dual pricing policy for diesel. In an announcement, she said that if the Central Government does not pay heed to the request, the Government of Tamil Nadu has no other option, but to approach the Supreme Court for a remedy.

In a letter to the Prime Minister Manmohan Singh, Jalalithaa said that the dual pricing policy, under which the price of diesel for bulk consumers has been hiked steeply by Rs 11 per litre would add a burden of Rs 750 crore to the State Transport Undertaking. 

"Perhaps you are unaware that this peculiar dual pricing policy has landed bulk consumers like State Transport Undertakings in a very precarious financial situation and in the case of Tamil Nadu, our State Transport Undertakings are forced to suffer an increased burden of Rs 750 Crore in their fuel bill per annum? I am appalled at the callousness and deviousness of this shocking move that defies all logic," she said.

The letter said that the dual pricing, along with a staggered increase of 55 Paise per litre per month for retail consumers appears "to be one of the many short-sighted measures taken by the Central Government, which is going to further increase the burden on the common people and aggrevate their misery."

The letter added, "I, therefore, request you, Mr. Prime Minister, to order an immediate withdrawal of this ill-conceived, ill-timed decision which is totally inflationary, discriminatory and anti-poor."

In another press release issued by the government, Jayalalithaa said that she expect the Prime Minister to accept the request and withdraw the higher price for diesel for bulk consumers including the State Transport Corporation and if the Central Government is not doing so, the State Government has to approach the Supreme Court on the issue. The Chief Minister added that the additional burden for the State Transport Corporation from the diesel price would be absorbed by the state government.

Further, in her letter to the Prime Minister, she added, "Given the opacity of the pricing policies of the oil companies, the serious doubts expressed about the methodology by which the so called “under- recoveries” by the oil companies are estimated and the profitability of the upstream oil companies, I really wonder whether there is any justification for the partial decontrol of retail diesel prices and the huge increase in the price for bulk consumers. In normal marketing practice, it is the bulk consumers who enjoy discounts."

This raises the question of what the true motive behind these perverse decisions could be. "I really wonder whether the move is to protect public interest or to benefit private interest," she added.