Centre fleecing oil PSUs: CPM

NEW DELHI: With the Left-UPA face off over fuel price hike showing no signs of ebbing, the CPM is now charging the finance ministry with “fleecing” oil Navratnas.

The Marxist party said public sector oil marketing companies like IOC, BPCL and HPCL were bearing the brunt of steep increase in international crude oil prices unlike private oil refiners who took advantage of the present import-parity pricing mechanism.

Hitting out at the petroleum ministry’s advertising campaign for justifying increase in diesel and petrol prices which said “if we don’t let our navratnas glow, energy security will cease to grow”, the party pointed out that an amount of Rs 3,000 crore as dividend has been paid during the last two years to North Block, when IOC, the biggest of the three navratna OMCs, is under financial stress.

“The petroleum minister is hopping from Mumbai to Chennai for getting a relief of Rs 150-200 crore odd from one state or the other, when North Block gets away with an additional Rs 6,656-crore tax and duty in ’05-06 along with a dividend of more than Rs 3,000 crore in two years.

Would any private company pay a dividend at 125% if its financial health is as bad as being projected by the government’s advertisement campaign for OMCs?” CPM leader Dipankar Mukherjee posed in an article in the forthcoming issue of the party mouthpiece “People’s Democracy.”

On Prime Minister’s plea that government cannot continue to subsidise energy consumption at the present scale, the CPM asked the UPA to spell out how long it will allow revenue mobilisation through taxes and duties and cess on petroleum products alone. “The UPA government has to answer for whom their hearts are bleeding — navratnas, common man or North Block.”
The article said that against the product sale of 48.9m tonne of IOC in ’04-05, the product sale in ’05-06 was 47.52m tonne but the excise duty paid was Rs 16,762 crore in ’04-05 against Rs 22,796 crore in ’05-06.

This meant a net gain of Rs 6,034 crore to the finance ministry though product sale was less, it said. Mr Mukherjee also pointed out to other tax and duty gains all of which added up to Rs 6,571 crore in ’05-06.

The Left parties, which have been demanding rationalisation of the tax structure in the sector, had sent a letter to Prime Minister Manmohan Singh saying the hike in diesel and petrol prices was “arbitrary” as no cost sheet on crude, refining and marketing was shown.