New Delhi, May 22 (UNI) Concerned at crude global prices touching an all time high of 135 dollars a barrel, Member of Parliament C Ramachandraih has asked Prime Minister Manmohan Singh to convene a meeting of Chief Ministers to reduce State levies and set up a 'Price Stabilisation Fund' to cushion the economy against the high volatility of oil prices.
Petroleum products are taxed both at the level of Centre as well as at State level and local bodies, thus imposing a huge burden on the consumer.
In a letter to the Prime Minister, the Rajya Sabha member said the State run refineries were taking a hit on account of the entire burden not being passed on to the consumers and the huge element of subsidy involved in this regard. The figure was as high as Rs 550 crores per day.
With global crude prices skyrocketing and a gloomy international market threatening the Indian economy, the government needs to clarify its energy policy.
''India imports more than 70 per cent of its crude requirements Fiscal measures, particularly the high tax component in the pricing of petroleum products, are equally responsible for escalating prices of fuel in the country,'' he said.
The MP said he failed to understand the rationale for not setting up a ''Price Stabilisation Fund'' to cushion the volatility in international prices of crude oil.
The average price of crude oil imported by India has doubled since June 2006, but state-set retail prices are much lower. The government had cut prices in November 2006 and February 2007, and then raised them in February this year.
State-run refiners are required to sell fuel at state-set prices to keep it affordable to the poor and also help keep inflation under control.
The government partly compensates them by issuing special bonds, which the oil firms can sell.
'The difference within the government on the method of calculating under recoveries of oil companies only reinforces the fact that there appears to be a lack of consensus among members of your Cabinet,'' he said.
The Chief Ministers should also deliberate on reducing levies on items such as bitumen, naphtha and lignite.
He said there was a need to intensify efforts to ensure India's energy security through tapping resources both in India and foreign locations.
''Indeed, we need to clearly independently define our energy security policy,'' he added.
UNI SR MP CS2010