New Delhi:
A core group of Congress leaders will meet this evening to discuss the steep petrol price hike of Rs 6.28 plus taxes effected on Wednesday that has people and political parties enraged.
The Prime Minister met Oil Minister Jaipal Reddy this morning, though Mr Reddy said after the meeting that it had nothing to do with the price hike. He also denied that he had been summoned to return to India a day earlier from Turkmenistan. (
Highlights: No instant solutions to petrol price hike, says Jaipal Reddy)
There has been talk that there could be a rollback of about Rs 2 to Rs 2.50, amid extreme pressure on the government to withdraw the price hike. The demand for a rollback has come even from within the Congress, which leads the UPA government at the Centre. Sources say that Opposition parties and allies apart, leaders of the Congress too have said they did not know about the price rise.
Sources say the hike could well have been structured with a margin for rollback built in to counter the demand of allies and the expected public anger. In November last, petrol prices were raised by Rs. 1.80, but the hike was withdrawn after much political pressure, including from the Congress.
Congress-ruled states like Uttarakhand and Kerala have, reportedly under party instructions, cut value added tax on petrol to ease the burden on the people. Delhi Chief Minister Sheila Dikshit too hinted at such a move soon.
Allies are keeping up the pressure. In Kolkata, West Bengal chief minister and Trinamool Congress chief
Mamata Banerjee will take her protest to the streets, marching from her Assembly constituency Jadavpur to Hazra in south Kolkata tomorrow evening. Her close aide and Railway Minister Mukul Roy led a Trinamool Congress protest in the city yesterday.
Ms Banerjee has said that while her party is committed to supporting the central government and will not pull out now as that would "create economic and political instability", it does not mean that they won't protest against "what is wrong."
The government has pointed out that petrol is deregulated and so subject to market prices. And that state-owned oil companies and not the government, raise prices. But there have been spontaneous peoples' protests across the country and allies like the Trinamool and DMK and "friends" of the UPA like the Samajwadi Party have insisted on a rollback.
The DMK has announced "peaceful protests" in front of collector's offices across Tamil Nadu on May 30. In Uttar Pradesh,
the Samajwadi Party government has called for a 'bandh' on May 31 in protest against the petrol price hike. The BJP-led NDA and the Left parties have also called a "Bharat bandh" on May 31.
The revision in petrol prices came as the rupee hit an all-time low against the dollar. Finance Minister Pranab Mukherjee blamed global uncertainties and the rising oil imports bill for the battering of the Indian currency. "The quantum of India's oil imports is substantial at around $160 billion to $170 billion annually," he said.
State-owned oil companies explained the steep hike as imperative given the losses that they have been incurring. They said they had waited for a moment when the price hike could be lower and also said prices, dictated by market considerations, could also fall soon.
India deregulated petrol prices in June 2010 but continues to subsidise kerosene, petrol and cooking gas to protect the poor from the impact of any inflation pressures. In the second half of 2011, oil companies began reflecting market realities more closely and raised petrol prices but were stopped from end-November on the request of the government - their majority shareholder - ahead of elections in some states. Petrol prices were last revised on December 1.
State-run oil companies have been losing Rs 8000 crores per annum because they were being forced to sell petrol at subsidised rates.