The Hindu : Opposition questions high prices of petrol, diesel

Online edition of India's National Newspaper
Wednesday, Apr 23, 2003

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Opposition questions high prices of petrol, diesel

By Our Special Correspondent

New Delhi April 22. Opposition members in the Rajya Sabha today questioned the Government on the high prices of petrol and diesel, forcing the Petroleum and Natural Gas Minister, Ram Naik, to admit that consumers had to pay exorbitant taxes on the basic rate of petrol and diesel which account for the high price of these crucial commodities in the retail market. Replying to supplementaries raised during the question hour, the Minister said a system would have to be gradually developed to bring parity with the international market.

Defending the decision to go slow on the reduction of domestic retail price of petrol and diesel to bring it in line with international prices, Mr. Naik said oil companies in India had not passed on to the consumers the entire steep hike in global oil price at the start of the Iraq war.

He said oil marketing companies could have hiked the price of petrol by Rs. 8.71 a litre and diesel by Rs. 6.35 a litre in tune with the surge in international oil prices prior to the Iraq war but chose to absorb some of the burden.

He said international oil prices surged on the eve of the Iraq war but subsided on indications of a quick end to the war.

These companies now had to make up for the burden they incurred due to absorbing a portion of the hike in oil and diesel prices just before the start of the war, he said which brought the entire Opposition on its feet. Kapil Sibal (Cong.) said much of the petrol and diesel prices that consumers had to pay were excise, octroi and other taxes.

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