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Petroleum Minister Shri Mani Shankar Aiyar informed the Lok Sabha today while replying a question on increase in international oil prices that the Government has been very careful about revising the domestic prices of major petroleum products. In fact as against almost similar $17 increase in international prices of crude oil in the period March 1998 - January 2004 in the period April 2004 - April 2005, the domestic prices of petrol were increased by only Rs.4.28 per litre (13% increase) between April 2004 – April 2005 while the domestic price increase was of the order of Rs.10.87 per litre (48% increase) in the period March 1998 – January 2004.
Similarly the domestic diesel prices were increased by Rs.11.49 per litre (112%) during March 1998 – January 2004 while the HSD prices were raised only by Rs.6.48 per litre (30%) during April 2004 – April 2005. In the case PDS kerosene the domestic price increase was of the order of Rs.6.49 per litre (258% increase) in the March 1998 – January 2004 period against a 0% increase in last one year or so. The increase in domestic LPG prices was also higher in the period March 1998 – January 2004 which was to the extent of Rs.105.6 per cylinder (78%) increase against Rs. 53.15 per cylinder (22%) increase in the period April 2004 – April 2005.
Shri Aiyar further informed the House that government was continuously monitoring price situation in international market which has seen unprecedented, sharp and spiraling increase since the end of 2003. The Indian basket of crude oil touched an all time high of US$ 52.83 per barrel on 4.4.2005 compared with an average price of $27.96 /bbl in 2003-04 and $39.21/bbl in 2004-05. There has been some softening in the week ending 16.4.2005 when the price declined to around $47/bbl. With a view to contain burden of increase in international prices of petrol and diesel on consumers, Shri Aiyar said that it was decided that the burden should be equitably shared also by the government and oil company. Thus the government reduced excise duties on petrol and diesel by 4% and 3% respectively effective 16.6.2004 and a further reduction of 3 % was made effective from 19.8.2004. Customs duty was also lowered by 5% w.e.f. 19.8.2004. In the Budget 2005-06 a reduction was announced in customs duty on crude from 10% to 5% and in other petroleum products from 15-20% to 10%.
The Petroleum Minister further hoped that the price band mechanism worked out by the Government w.e.f. 1.8.2004 and since kept in abeyance due to breach within weeks, might be restored when international price stabilize or the Government decides so. As regards withdrawal of cess, Shri Aiyar said that the Ministry of Finance has informed that they have received representation from All India Confederation of Goods Vehicles Owners’ Association (AICGVOA). The Association has requested Government to review/withdraw the additional cess of 50 paise per litre on diesel or as an alternative, exempt truckers from the payment of toll on highways.
Rcj/kc/ LS prices :21.04.05
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