Chief Minister Buddhadeb Bhattacharjee has urged Prime Minister Manmohan Singh to withhold the petroleum price hike and review the entire situation.
In a letter written on Tuesday to Prime Minister Manmohan Singh, Mr. Bhattacharjee said that he disagreed with the Centre's recent decision to significantly hike the prices of diesel, petrol, cooking gas and kerosene.
The letter said: “There may be, due to this decision of deregulation, an additional cause for price instability in this sector with its consequence on the general price level as well.”
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Mr. Bhattacharjee said that when the Government of India has such inadequate control over the supply of crude oil, there is an inherent danger in leaving the price to market forces, which are known to be specially volatile due to speculation.
He said the country is still over-dependent on import of crude oil to the tune of about 80 per cent of its requirement.
“There is lack of clarity in the method of relating domestic price of petro-products with the international price level as well as in the profit and loss statements of the oil companies.”
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The letter said that the hike will not only immediately and directly increase the cost of transportation of goods and mass transit vehicles, but will also have a cascading effect on the cost of production of farm goods and also industrial goods.