Fuel hike minimal, more corrective steps needed: PM

New Delhi, Jun 4 (UNI) Acknowledging that the hikes announced in the prices of petrol, diesel and LPG would not be popular, Prime Minister Manmohan Singh today described the move as ''bare minimum'' and said there was need for ''more corrective measures in future on many fronts.'' He urged state governments, which collected hefty sales tax on petroleum products, to share the burden by cutting levies, and appealed to the people to learn to pay the actual economic costs of petro products. He also called for conservation of energy and development of renewable sources, including nuclear energy.

''Business cannot go on like this for ever...we need to be efficient and economical in our use of energy. And we need to pay the economic cost of petroleum products,'' Dr Singh said in his address to the nation, explaining the compulsions of the government for effecting the hikes.

Earlier in the day, he had set up a high power committee headed by Planning Commission Member B K Chaturvedi, who has been Cabinet Secretary and Petroleum Secretary, to examine the impact of hikes in the petro products since 2004 on the financial status of oil companies.

In his 15-minute address, he pointed out that the international prices of crude had gone up over three-fold, from 39 dollars in 2004 to more than 130 dollars now, and keeping the retail prices unchanged would result in an annual loss of Rs 2,00,000 crore.

''Our oil companies cannot go on incurring losses. This way, they will have no money to import crude oil from abroad.'' Ruling out abolition of duties on petroleum products to offset the spiralling international prices, Dr Singh said the government had limitations.

''To compansate them (oil companies), the Central Government has reduced taxation of petroleum products to the extent possible. But given the commitments of the government for vital development and non-development expenditure, taxes on petroleum products cannot be completely eliminated. Thus a rise in prices is inevitable,'' he reasoned.

However, the government's endeavour has been to raise the prices only by a moderate amount, covering only 10 per cent of the losses, with the remaining 90 per cent still being borne by the Centre and oil companies.

On the other hand, ''I would like the nation to remember that issuing bonds and loading deficits on oil companies is not a permanent solution to this problem. We are only passing on our burden to our children who will have to repay this debt.

''Cutting down on the returns of our oil companies will choke a sector vital for the growth of the economy. We need more corrective measures in future on many fronts. In the long term, our country must have a sound strategy for energy security.'' He said that to begin with, each citizen should conserve energy and contribute to national security. ''I urge every citizen to conserve energy at every step, every minute of the day. Be it petrol, diesel, kerosene, LPG, electricity or even water, let us learn to save and use efficiently. Let us reduce wasteful consumption of petrol.'' Winding up his address, he said there was need to develop alternative sources of energy, whatever the source. ''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 the responsibility of the government was not only to ensure a secure future for the present generation, but also for the future generations. ''We cannot think only for ourselves, for the present, for the here and now. We must think about what is good for future generations - for the welfare and security of our children, grand children and their children. It is our duty to ensure their food security and energy security.

''The steps taken today are part of that process.'' UNI SN RP RAI2030