Oil price hike unpopular, but inevitable: PM

“I know that the price increases we have had to announce today will not be popular, even though they are only modest,” Singh said his address explaining the circumstances which forced the UPA coalition government for a hefty fuel price revision.

With the Centre having taken a revenue hit of Rs 22,660 crore by cutting duties, the Prime Minister asked the state governments to reduce their taxes and levies as well.

“The Central government, oil companies and consumers are bearing a part of this immense burden. It is, therefore, incumbent on state governments, many of whom tax petroleum products substantially, to also contribute to this national effort by suitably reducing state taxes and levies,” he said.

Within hours of the decision taken by the Union Cabinet, the Left-ruled West Bengal government slashed sales tax on petrol and diesel by up to five per cent giving a relief of Rs 2.12 and Rs 1.38 a litre on the two fuels.

With the Indo-US nuclear deal in limbo because of opposition by the Left parties, the Prime Minister sought to garner support for the country going for nuclear energy.

“We cannot remain captive to uncertain markets and unsure sources of supply. We have to develop renewable sources of energy, including nuclear energy,” he said.