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Journalism of Courage
When Mani Shankar Aiyar goes to the Cabinet next week, he will ask for a hefty rise in petrol and diesel prices.
The increase in retail price has been pegged at Rs 2.85 a litre for petrol, and Re 1 a litre for diesel, using the international prices for the second fortnight of February.
If the oil marketing companies were to absorb this impact, their under-recovery would amount to around Rs 264 crore (about Rs l06 crore on petrol and Rs 158 crore on diesel) for one fortnight, Aiyar’s proposal states.
He also wants to argue that the change in excise duties has placed a heavy burden on the oil companies.
In the Budget 2005-06, Finance Minister P Chidambaram cut customs duty on petrol and diesel to 10 per cent from 15 per cent but rejigged the excise duty on both products to a mix of ad valorem and specific rates.
This will apparently hit the oil majors.
Additionally, from April 1, the oil companies would have to charge an extra 50 paise per litre on both fuels through a road cess to meet Chidambaram’s proposal to beef up resources for National Highways.
Aiyar’s argument would be that the rejig has left the oil companies poorer with with the public sector refineries losing Rs 1,200 crore a year as their duty protection rate got reduced by one per cent with cuts in customs duty on products.
