CMs to reply to Naik by month-end

Naid added that `further, the finance minister will be back by September 29. I also need to complete my calculations. These are the reasons why the oil price hike is being held back", Naik added.

If the Central government can reduce the customs and excise duties, there is no reason why the state governments cannot take a cut of 5 per cent in their sales tax, Naik added. The Chief Ministers should understand the situation in the context of the present rise in the crude prices and that Indian imports almost 70 per cent of its crude requirements. The states have anyway made gains when the prices were ruling high.

Naik further stated that there is a possibility of a cut in prices once the deficit on the oil pool account goes down. If the international crude prices comes down and touch $24 a barrel, the government would consider price cuts.

Naik added that the oil pool deficit is expected to touch Rs 23,600 crore by the end of the current fiscal. This calculation is based on the assumptions that the international prices of crude would rule at around $30 a barrel, the rupee dollar ratio would be in the range of 46:1 and that India would continue to import the same amount of crude.

Given this oil pool deficit, Naik said that one third of the burden has to be passed on the consumer. "The Cabinet and the NDA has entrusted me with the job and I am doing it very reluctantly, but there are no other options left", Naik added.µ Naik said that the finance ministry has agreed for reduction in excise and custom duties. This along with oil bonds and other instruments would take care of the two third of the deficit.