"It is easy to transfer the burden to the consumers but it will increase inflation. The government should rather change the tax structure and earmark its tax earnings from oil companies," party politburo member Sitaram Yechury said.
The finance ministry is not in favour of petroleum ministry's proposal for cutting customs duty on crude to 0 from 5 per cent and that on petrol and diesel to 2.5 per cent from 7.5 per cent or halving excise duties on the two.
"Imposing 'windfall profit tax' on private companies could be another solution while moving away from the 'import parity price system' as the US did," Yechury said.
While the public sector companies were suffering losses, the private oil companies were earning huge profits through import parity policy of pricing, he said.
The CPI(M) had yesterday demanded that it was necessary to recover the 'windfall gains' of private and JV oil producing companies and private refineries like M/S Cairns, Reliance and Essar, which were extracting oil and gas in India.
"It would be a failure on government's part to allow upstream contractors additional gain of $70-80 per barrel without any extra work," the party said, adding that many other countries had "renegotiated their contracts with a threat of imposing windfall taxes on such profits."
"It is time that the government takes charge and recovers unintended gains from upstream contractors," it said.
