A day after Trinamool Congress chief Mamata Banerjee threatened to pull out of the UPA government at the Centre over repeated increases in fuel prices, Union Finance Minister Pranab Mukherjee said it was “quite legitimate” for any party forming part of the coalition to express its concerns to the Prime Minister.

While Ms. Banerjee repeatedly said her party had never been informed about the decisions to increase fuel prices, Mr. Mukherjee pointed out that the Trinamool Congress was part of the Empowered Group of Ministers (EGoM) that decided to decontrol petrol price on June 28, 2010.

He made no mention of Ms. Banerjee's announcement that the Trinamool Congress Parliamentary Party had decided to withdraw support to the government, instead reacting only to her decision to wait until her party representatives spoke to the Prime Minister.

“It is quite legitimate for any political party, which is a constituent of the UPA, to express its concerns on any issue and discuss [it] with the Prime Minister. They [the Trinamool] have done exactly that,” he told journalists on Saturday on the sidelines of the seventh K.C. Basu Endowment Lecture at the West Bengal National University of Juridical Sciences here.

“They have stated that after the Prime Minister comes back, they will take up some of their concerns. I do not find anything wrong in it,” he said.

Mr. Mukherjee pointed out that all UPA constituents were represented in the EGoM, of which he was the Chairman.

“Only the price of petrol was increased currently, which was deregulated, and this deregulation did not take place today; it took place on 28 June, 2010,” he said.

States' share of taxes levied on petrol higher

Asserting that oil marketing companies had given “adequate reasons” for their decision to increase petrol price, Mr. Mukherjee said here on Saturday that the States' share of taxes levied on petrol was higher than that of the Central government.

Asserting that oil companies would not be able to import crude oil if they made losses, Mr. Mukherjee said: “Oil marketing companies have given adequate reasons why they had to do it [increase petrol prices], because they import crude petroleum for us. Our total annual requirement is more than 106 million tonnes of crude; we import nearly three-fourths of it.”

He said Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd. had together reported a loss of Rs. 12,000 crore in the first six months of the current year and the Indian Oil Corporation was also likely to go into debt. If the oil companies were in the red, they would not be able to import crude.

He also said that last year, when the average price of petroleum was $85 per barrel, the under-recovery was Rs. 78,190 crore. With the average price of petroleum pushed up to $110 per barrel now, the under-recovery is likely to be Rs. 1.32 lakh crore.

Stating that the States receive one-third of the taxes collected by the Central government, Mr. Mukherjee said: “In one year we [the Centre] collected Rs. 96,000 crore from various central taxes. The States collected Rs. 84,000 crore. After devolution, the Centre's share came down to Rs. 64,000 crore.”

However, he was not “advising anything to the States.”

Mr. Mukherjee cited Delhi where the refinery-gate price of petrol was Rs. 41.64 but its retail price Rs. 68.64. He said that while the Centre collected Rs. 14.78 and the Delhi government collected Rs. 11.44 as taxes, the latter also got a third of the Centre's share – leaving the Centre with just two-third of the revenue.

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