India cannot afford import of large quantities of crude oil: Finance Minister Pranab Mukherjee

NEW DELHI: Amid rising global crude oil prices, Finance Minister Pranab Mukherjee today warned of "disastrous consequences" if corrective steps are not taken to deal with the problem as India cannot afford import of large quantities at high prices.

"Petroleum prices are increasing by leaps and bounds. We cannot keep them under any carpet. If we do not take corrective measures, we will have to face disastrous consequences," he said.

"The question is whether the country would be in position to import 170 million tonnes, if the prices go up unchecked," he said.

Mukherjee said he has asked oil experts and Chairman of Prime Minister's Economic Advisory Council (PMEAC) to find out if the country can reduce its oil import requirement.

India imports about 170 million tonnes, while domestic production is about 37-38 million tonnes.

While financialisation of oil is taking place, he said, "I cannot entirely pass on the extra burden to the consumers."

"Apart from his or her suffering individually, it will have its inflationary impact. That is also an issue which we shall have to address," he said.

Mukherjee said, the problem is complex and "to complex problem you cannot expect to have a simplistic solution".

"Therefore, it will require in-depth studies, discussions, debate among ourselves to find out a solution and, exactly, the Prime Minister is trying to achieve that," he said.

Mukherjee also said another issue which has to be addressed collectively is high incidence of taxes imposed by Centre as well as states.

He said the government will bring the Direct Taxes Code (DTC) bill in the monsoon session, saying that there was no need to wait for the Budget.

Mukherjee said there was progress on the Goods and Services Tax (GST). GST will overhaul the country's indirect tax regime.