Union Budget 2008| Hike fuel prices 20%, LPG Rs50

Union Budget 2008| Hike fuel prices 20%, LPG Rs50
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First Published: Thu, Jan 17 2008. 02 25 PM IST
Updated: Thu, Jan 17 2008. 02 25 PM IST
New Delhi: At a time when under recoveries to all marketing companies for petrol, diesel, kerosene and LPG have respectively reached levels of Rs9.20, Rs10.94, Rs19.89 per litre and Rs331.34 per cylinder on LPG, industry chamber Assocham has suggested that the government should at once increase their prices and pass on the burden of increasing under recoveries to the common man and save oil companies from getting bankrupt.
International crude oil prices will further stiffen and are unlikely to be relaxed in view of increasing energy demand and it is in the interest of oil marketing companies that the government effect at least 20% hike in petroleum products like petrol, diesel and kerosene.
In Delhi alone, tax element on petrol works out to the extent of 50% and on diesel, slightly less than 30%; estimates reveal that in 2007, crude oil price at international level increased by over 60% and prices of diesel and petrol by about 58% and 55% respectively. Despite that, their retail prices were kept almost absolutely untouched.
Between March 2002 to December 2007, LPG and kerosene prices internationally become dearer by about 350% and 340% respectively whereas the kerosene retail price was barely increased though LPG prices went up by approximately 16% during the period.
It is also estimated that in 2006-07, there was an average inflation of 5.27% and petrol contribution was around 0.12% and that of diesel 0.38%. Food grains and cereals contributed 0.49%, milk 0.26%, electricity 0.23% in average inflation of 5.27% in 2006-07.
Key Recommendations
* Hike recommended for LPG to be within the range of Rs50 per cylinder
* Subsidy content on petroleum products to be eliminated, otherwise losses of oil marketing companies will exceed much beyond the estimated amount of Rs70,000 crore for current fiscal
* Oil to remain single largest fuel for many decades and continuing subsidies on petrol, diesel and kerosene as also LPG to work against national interests
* FM to increase prices of petroleum products immediately and to rationalize excise element on petrol, diesel, kerosene and LPG as also taxes on transportation of fuels to be made rational
* Government to no longer keep petroleum prices at artificial levels as it would increase consumption of petroleum products and reduce energy conservation and efficiency efforts for which various state sponsored campaigns are going on quite aggressively
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First Published: Thu, Jan 17 2008. 02 25 PM IST
More Topics: Union Budget 2008 | fuel prices | CNG | LPG | oil |