'Fuel prices have been raised at an inopportune time'

TR BAALU (SRIPERUMBUDUR): Madam, as far as Tamil Nadu is concerned, every year on June 12, Mettur Dam is opened for irrigation. But till date, this particular dam has not been opened because it is almost dry. Water has to come from the adjacent state of Karnataka. But there is a dry spell even in Karnataka.

The farmers of Tamil Nadu depend on wells and for well irrigation, diesel is the most important component. But our friends here have increased the price of diesel by Rs 2 per litre. Definitely, as some of the friends in the Opposition, as also our own associates have said, the increase in the price of diesel has been effected at an an inopportune time. This is not the proper time to increase the price of diesel. The price has been increased at a very bad time. The government may say that it is not at all concerned about the increase in the price and that it is a professional decision taken by the oil companies. But at the same time, we should not shirk our responsibility. The government could definitely intervene because the President of India has a share in these companies. So knowing fully well that Parliament is going to be in session today, this increase of yesterday night is nowhere justifiable.

Madam, this government is not a unilateral Government. It is a government by the Congress, by the Trinamool Congress, by the DMK, and so on. It is somewhat an alarming situation wherein the government headed by Manmohan Singh, duly supported by Madam Sonia Gandhiji and Dr Kalaignar, is taking a decision which is not at all good. It has to be discussed at least with leaders of the parties or at least it should have been discussed in the Cabinet. I strongly condemn this action of the Government.

Petroleum Minister Murli Deora
When the price of the Indian basket of crude oil fell from its highest level of $ 142/bbl in June, 2008, to $ 40 per barrel in December 2008, the government responded by reducing the price of petrol by Rs 10 a litre and the price of diesel by Rs 4 a litre, within a space of two months. Thereafter, the international price of crude oil has risen from $40 per barrel in December 2008 to around $70 per barrel today. This increase in crude oil prices by about 75 per cent since December, without a corresponding increase in retail selling prices of sensitive petroleum products, had resulted in OMCs’ under-recoveries going up. The OMCs’ under-recoveries were projected to be Rs 70,200 crore, at an average Indian basket crude price of $70/barrel, during 2009-10.

Any delay in price revision would have jeopardised the OMCs’ liquidity position with attendant consequences for smooth supply and distribution of essential fuels across the country.

(Interruptions)
HARIN PATHAK (AHMEDABAD EAST): It is not a marginal increase.… (Interruptions)

BASU DEB ACHARIA (BANKURA It is not a marginal increase.… (Interruptions)

Petroleum Minister Murli Deora: How many times you increased and how much was the increase, I will give you the figures.

However, while considering a price increase, the government has kept in mind the interest of the ‘aam admi’ and the vulnerable sections of society. Accordingly, against the desired increase of Rs.6.94 per litre, the retail price of petrol has been increased only by Rs 4 per litre. Similarly, against the desired price increase of Rs 4.11 per litre in diesel, the retail price has been increased only by Rs 2 per litre as you know.

… (Interruptions)
Having regard to the need to provide relief to the poor and the middle classes, the government has decided not to increase the retail prices of PDS Kerosene and Domestic LPG – not even one rupee or one paise even. The government is bearing a burden of Rs.15.26 on each litre of PDS Kerosene and Rs.92.96 on each cylinder of Domestic LPG. To ensure uninterrupted supply of these two products at subsidised prices, the government is prepared to bear the projected subsidy burden of Rs 30,000 crore in the year 2009-10. The government will bear the burden of Rs 30,000 crore for not increasing even one paise on LPG and PDS Kerosene. … (Interruptions)

Madam, we will keep the views expressed by the honourable members in mind and we will respond suitably in case there is a decline in the international prices of crude oil. … (Interruptions) At the same time, I would appeal to the state governments to do their bit by revising downwards the Sales Tax imposed on Petrol and Diesel. Madam, I thank you very much.

(Views expressed in a Lok Sabha debate on 2nd July)