Govt to take ‘ long- term view’ on fuel price hikes

■ Centre seeks to find long term solution for fuel pricing

With petrol and diesel prices continuing to soar to record highs, the Centre yet again pledged Wednesday that it would be taking steps to contain it.

After a meeting of the Union Cabinet, law minister Ravi Shankar Prasad said the government “wants to take a long- term view on pump prices of petrol and diesel to shield consumers from the volatility in global markets”.

“The government is keen that instead of having an ad hoc measure it may be desirable to have a long- term view which addresses not only volatility but also takes care of the unnecessary ambiguity arising out of frequent ups and downs. That process is underway,” said Mr Prasad. “A new sense of urgency has developed,” he added.

Petrol and diesel prices were hiked for the 10th straight day across the country on Wednesday since May 14, when the Karnataka elections ended. In Delhi, petrol was hiked by 30 paise to touch a record high of ` 77.17 per litre, as diesel price was hiked by 26 paise to a new lifetime high of ` 68.34 per litre.

With the petrol and diesel prices continue to soar to a record high, the Centre yet again on Wednesday assured that it was taking steps to contain it.

After the meeting of the Union Cabinet, minister, Ravi Shankar Prasad said that the government “wants to take a longterm view on pump prices of petrol and diesel to shield consumers from the volatility in global markets”.

“The government is keen that instead of having an ad hoc measure it may be desirable to have a long- term view which addresses not only the volatility but also takes care of the unnecessary ambiguity arising out of frequent ups and downs. That process is underway,” said Mr Prasad.

Petrol and diesel prices were hiked for straight 10th day across country on Wednesday since May 14 when Karnataka Assembly elections ended. In Delhi petrol price was hiked by 30 paise to touch record high of ` 77.17 a litre. The diesel price was hiked by 26 paise to new lifetime high of ` 68.34 a litre. In Mumbai, petrol crossed psychological high of ` 85 a litre.

The minister said that issue of frequent hike in fuel price is a matter of deb- ate and concern. “The government is involved in this whole process, including the concern ( about rise in prices) and also the uncertainty,” he said. With geopolitical situation leading to an uncertainty over the direction of international oil prices, “a new sense of urgency has developed”, said the minister.

On the question of excise duty, he said proceeds from such taxes are used for country’s development including building of highways, digital infrastructure, electricity to villages, hospitals and education. “So tax on fuel is linked with developmental issues. We understand that there is a compelling need for a long- term solution ( to deal with the present situation).”

According to sources, a high- level meeting took place in PMO on Tuesday where the issue on how to give relief to the general

public from high fuel prices was discussed.

However, according to reports, the PMO too like the finance ministry is reluctant to cut excise duty at current juncture and instead explore other measures including asking oil firms to share a part of the burden for some time and nudge states to cut VAT.

Stepping on the gas Congress intensfied its attack on the government on fuel rise.

Congress leader P. Chidambaram claimed it was possible to cut up to ` 25 per litre in petrol prices but the government will not do so. “The Central government saves ` 15 on every litre of petrol due to fall in crude oil prices. Central government puts additional tax of ` 10 on every litre of petrol. It is possible to cut up to ` 25 per litre, but they will cheat the people by cutting petrol price by ` 1 or ` 2 per litre.”