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Deora attacks Opposition hypocrisy on fuel price hike

Deora attacks Opposition hypocrisy on fuel price hike
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First Published: Tue, Jun 29 2010. 05 09 PM IST
Updated: Tue, Jun 29 2010. 05 09 PM IST
New Delhi: Attacking opposition hypocrisy on fuel price hike, oil minister Murli Deora today said that the BJP-led NDA regime had raised kerosene rates three fold and the Left-supported UF government notified moving towards market-linked pricing of LPG and kerosene.
Rebutting opposition criticism for the 26 June decision to raise petrol prices by Rs3.50 a litre, diesel by Rs2 per litre, LPG by Rs35 per cylinder and kerosene by Rs3 per litre, Deora said that the government was “compelled” to raise fuel prices by “bare minimum” to save public sector oil firms from precarious financial situation.
“The NDA government raised price of PDS kerosene from Rs2.52 per litre in January 1998 to Rs9 per litre in March 2002. This hike was 258% even though crude oil prices rose by just 147% during the period,” he said here.
The Congress-led UPA government did not increase kerosene prices for the past six years despite price of crude oil (raw material for making petrol, diesel, domestic LPG and kerosene) more than doubling from $36 a barrel in May 2004 to $78.
“We raised kerosene rates by Rs3 per litre against the required increase of Rs18.07 per litre,” he said. “We have ensured that the poor is not unnecessarily burdened.”
“We will continue to subsidise LPG and kerosene which are the common man’s cooking fuels. Even after last week’s price increase, kerosene price is Rs15.07 per litre below cost and LPG is under priced by Rs226.90 per cylinder,” he said.
The United Front government, of which Left parties, TDP and Samajwadi Party were constituents, in November 1997 notified full deregulation of prices of petrol, diesel, LPG and kerosene by 2002.
According to this schedule, rates of kerosene and LPG should have been at least double of the revised price of Rs12.32 per liter and Rs345.35 per cylinder respectively.
Deora said NDA government had in April 2002 freed petrol and diesel prices from government control, with rates being revised twice a month based on international prices.
“We have freed price of petrol, a fuel that is used in cars. Diesel prices will be eventually freed but government reserves the right to intervene in case of sharp spike or excessive volatility in global prices,” he said.
“What we did was bare necessity. We were compelled to do so because oil PSUs were faced with Rs74,300 crore under recoveries (revenue loss on fuel sales this fiscal),” he said. “The opposition is being a hypocrite in its criticism.”
Even after the hike, oil PSUs would be saddled with Rs53,000 crore of under-recoveries. “Petrol price has increased only 53% and diesel 85% since May 2004 despite crude oil prices rising by 111%,” he said.
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First Published: Tue, Jun 29 2010. 05 09 PM IST
More Topics: Murli Deora | Opposition | Price hike | LPG | Kerosene |