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Bardhan stamps out oil price hike

New Delhi, May 2: Left leaders today said a categorical 'no' to the government's proposal to raise the price of petrol by Rs 4.30 and that of diesel by Rs 4.90.

The reaction came after Union petroleum minister Mani Shankar Aiyar held two separate meetings with CPM and CPI leaders.

Aiyar had met CPM politburo member Sitaram Yechury last week. This afternoon he met CPI general secretary A.B. Bardhan.

The Left is refusing to budge from its position that the government need not hike petroleum product prices as there are alternatives to meet the international situation.

'We suggested that excise and customs be brought to zero, refinery charges, which are highest in India, be brought down,' Bardhan said. The party also proposed a review of the 50 paise cess on diesel and petrol for development of highways.

The ministry, however, feels these measures would be inadequate as crude prices account for 75 per cent of the cost of products. Unless prices of petroleum products are hiked, oil companies would have to take a hit of Rs 37,000 crore, the CPI was told.

The CPI's contention is that the price rise would fuel inflation. The government maintains that inflation will go up by a mere 0.5 per cent, but 'we feel the impact would be much more', Bardhan said.

'We will meet again,' he said, adding that no agreement was reached today.

The proposal to increase prices of petroleum products has been the bone of contention between the Left and the government since the Congress-led coalition came to power last year. The Left does not want to be perceived as giving its nod to any government move that could lead to an all-round price rise.

At a news conference this afternoon, CPM MP Nilotpal Basu said the oil industry was making huge profits and so there was no need for the government to transfer the burden of rising international prices on the common man.

Bardhan said Aiyar had assured the CPI that the government was not considering a hike in the price of kerosene and it was still to reach a decision on the LPG price.

The other point of conflict between the Left camp and the government is over the 2003 Electricity Act that the NDA government had passed in Parliament to facilitate privatisation in the sector.

Bardhan met Union power minister P.M. Sayeed today and warned him that electricity federations would go on a 48-hour strike from May 31 if the government did not take a fresh look at the act immediately, as assured in the common minimum programme.

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