Apex business chambers — Assocham and Ficci— today welcomed increase in prices of petrol and diesel stating the decision would help better management of government finances and improve the balance sheets of oil marketing firms. However, exporters' body FIEO and the PHDCCI, representing the business interests of north India said the decision was ill-timed. “This (price revision) would help in managing the oil subsidy. Therefore, it will have a major implication on the fiscal deficit management,” Ficci President Harshpati Singhani said.
The government today hiked petrol and diesel prices by Rs 4 and Rs 2 per litre, respectively, on the back of a sharp rise in global crude rates.
While revision in the fuel rates would have an impact on prices, the inflation was in the negative territory giving scope for an action on a difficult subject. Assocham, while hailing the decision, said it would help state-owned oil companies. “We welcome it because it will help state-owned downstream oil companies to avoid red ink on their balance sheet,” Assocham President Sajjan Jindal said.
He also favoured a hike in LPG price, which the government left untouched.
Oppn flays Govt
The fuel price hike drew a sharp attack from the Opposition which described the announcement as “the cruel first gift” and a “noble thanksgiving” by the new government but the Congress said it was a tough decision which was unavoidable in larger national interest.
Striking a sarcastic note, the Bharatiya Janata Party (BJP) said the hike was a “noble thanksgiving” by the United Progressive Alliance (UPA) dispensation and its first “proven achievement of first 100 days”.
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“This seems to be a noble thanksgiving of the UPA government to the people of India after formation of the new government. They had reduced the prices of petrol and diesel and after the results and formation of the government they have decided to enhance it again,” BJP spokesperson Rajiv Pratap Rudy said. The CPI(M) said the measure was "the cruel first gift" from the new government which it said has shown “contempt” for Parliament by taking such a decision on the “very eve” of the Budget session. Congress spokesman Manish Tewari said: “These are tough decisions but have to be taken in larger national interest.”
CPI Secretary D Raja said the increase in fuel prices on the eve of the Budget session of Parliament throws to wind principles of executive accountability to Parliament and the “arrogance” of the UPA government.