NEW DELHI, 11 May 2006 — India’s communist parties, which keep the federal government afloat, said yesterday they would oppose any move to raise the regulated price of petroleum products despite soaring crude oil prices.
“The government should reduce taxes instead of raising prices,” Sitaram Yechury, a senior communist leader told reporters after a meeting with Petroleum Minister Murli Deora and top Petroleum Ministry officials.
He said the government should protect the common man by slashing taxes, which account for 55 percent of the petrol price and 34 percent of the diesel price.
Deora said he had not formally discussed a price increase with the Finance Ministry, but officials said the meeting with communist leaders was held to build a political consensus for a moderate increase in retail prices.
Petroleum Ministry officials said refiners were reporting losses, losing their credit ratings and would require heavy subsidies from state exploration firm Oil and Natural Gas Corp. State refiners — Indian Oil Corp., Hindustan Petroleum Corp Ltd. and Bharat Petroleum Corp. Ltd. would suffer a revenue loss of nearly 750 billion rupees ($16.7 billion), officials said. The state-administered price of petrol and diesel, frozen since September, was adequate to compensate refiners if crude oil prices fall by $20 a barrel, officials said.
