The Finance Minister, official sources said, will be writing letters to the state CMs to explain the rationale of the price hike and the need to reduce sales tax on cooking gas to give some relief to the aam admi.
While raising the prices of diesel, LPG and kerosene, the central government also decided to slash duties, which would result in a revenue loss of Rs 49,000 crore per annum.
In order to partly neutralise the impact of the price hike, West Bengal Chief Minister Mamata Banerjee yesterday decided to withdraw sales tax on cooking gas. The decision would reduce the price of a cylinder of LPG by Rs 16.
In view of the widespread protests against the price hike, the Congress has also asked its Chief Ministers to look at the possibility of providing similar relief to the common man.
The Group of Ministers (GoM), headed by Mukherjee, on Friday decided to raise the price of diesel by Rs 3 per litre, cooking gas by Rs 50 per cylinder and kerosene by Rs 2 per litre.
The price of petroleum products was raised to compensate the oil marketing companies, which are incurring losses on account of the increase in prices of crude in the international market.