New Delhi, Mar 17 (ANI): Finance Minister Pranab Mukherjee has admitted that the hike in fuel price has affected the life of the middle class families and lower income groups.
"I do know that when prices go up, common people suffer, poor people suffer. It is not unknown. But at the same time you can't ignore the fact that when you are to import certain commodities at high prices, it will have to be reflected somewhere," he said in the course of his reply in the Rajya Sabha on Tuesday.
He also noted how the import of commodities at higher prices leads to inflation.
"Noticing the volatile behaviour of the petroleum prices, and this is a common knowledge it does not require to be an economic expert that when the recovery in the industrialised countries, in Europe and North America start in full swing, there will be higher demand of oil and there is a propensity of oil prices going up," he said.
In the Union Budget for the year 2010-11 that Mukherjee had presented, the basic customs duty of five per cent on crude, 7.5 per cent on diesel and petrol and ten per cent on other refined products were levied.
He also raised the excise duty on petrol and diesel by one rupee per litre each to begin a process of fiscal consolidation. Immediately, oil companies had raised the prices of petrol and diesel across the country.
Mukherjee also raised excise duty across the board on all non-petroleum products by two per cent to 10 per cent and brought in more services in the tax net. (ANI)