Government must compensate OMCs: Yechury

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New Delhi, Jan 27: The Communist Party of India (Marxist) CPI(M) today asked the government to compensate the oil marketing companies (OMCs) reeling under huge losses, from the funds gathered by levying Ad-valorem Tax before hiking the fuel prices which is on the anvil.

CPI(M) Politburo member Sitaram Yechury said the government should first compensate the mounting losses of the state-run OMCs from the fund accumulated by charging Ad-valorem Tax on the petroleum products. He added that if this measure is not sufficient to counter it, they will go for other options. ''We all are aware that the crude prices in the internaional market is moving northward, which is causing huge losses to the OMCs.

The government should first compensate the OMCs from the fund gathered by leving Ad-valorem Tax on petro products, and if this does not work, we will explore other options,'' Mr Yechury told reporters while releasing a study on agriculture here.

He said his party, the main ally of the UPA Government, will not allow the government to make profit through charging Ad-valorem Tax, and put the whole burden on the commonman.

Mr Yechury's statement comes in the wake of Finance Minister P Chidambaram hinting at a moderate price hike at Davos last evening.

The Finance Minister said the government cannot pass the full burden of runaway rise in crude prices to consumers as it would make the rural economy come to a grinding halt.

Mr Yechury warned if the government hikes the fuel prices, this would lead to a political imbroglio.

Bharat Petroleum Corporation Ltd (BPCL) Hindustan Petroleum Corporation Ltd (HPCL) and Indian Oil Corporation Ltd are expected to close the fiscal with a total loss of Rs 69,753 crore on sale of petrol, diesel, LPG and kerosene as the government has not allowed them to raise prices in line with the cost of imported crude.

Petrol is being sold at a loss of Rs 8.74 a litre, diesel at Rs 9.92 per litre, kerosene Rs 20.53 a litre and LPG at a loss of Rs 256.35 per cylinder.

UNI

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