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Consumers to be spared major burden of oil price hike: PTI

The government Sunday said it would pass on to consumers only one-third of the Rs 23,600 crore oil pool deficit by raising prices of petrol, kerosene, liquefied petroleum gas, diesel and automatic transmission fluid by the month-end while making up for the rest by cutting duties and floating oil bonds.

"We will pass on only one-third burden (about Rs 8,000 crore) to consumers," Union Petroleum Minister Ram Naik told reporters while ruling out a roll-back in prices after the announcement in the next few days.

The Centre also appealed to states to mitigate the burden of hike in petro product prices on consumers by slashing sales tax by five per cent.

"I am going to write to all chief ministers to cut sales tax on petroleum products by five per cent. They should help us reduce the burden on the common man," Naik said.

"We will consider all the aspects while raising prices of products... rolling back doesn't give credit to the government," he said when asked if the Centre would substantially hike prices and then roll back part of it.

Stating that the Finance Ministry was expected to mop up about Rs 41,000 crore from excise and customs as against the budgetary target of Rs 27,000 crore during 2000-01 on account of a spurt in global crude prices, Naik said the finance minister agreed to cut duties to pass on some surplus accrual.

The formula for mitigating the Rs 23,600-crore pool deficit during the current fiscal on the presumption that crude prices would average 30 dollars a barrel was evolved at a meeting of secretaries in the Prime Minister's Office, finance and petroleum ministries after Naik was authorised by the Cabinet and the National Democratic Alliance to take appropriate steps.

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