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CPI(M) hits out at NDA govt over diesel price deregulation

Source: PTI
October 20, 2014 16:24 IST
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The CPI(M) on Monday hit out at the BJP-led government for deregulating diesel pricing, saying this amounted to "abdication of its responsibility" of regulating prices of a crucial item which directly impacts general inflation.

"This is nothing but an abdication of the responsibility of the government to control and regulate the prices of a crucial item of fuel which has a direct impact on the prices of all essential commodities," the party Politburo said in a statement.

Demanding restoration of administered pricing mechanism (APM), CPI(M) said the Narendra Modi government has "completed the dismantling of APM for petroleum products and introduced the import parity pricing in line with the prices of finished products in the international market. This will only help the oil companies including the private ones."

Noting that the deregulation was announced along with a reduction in retail diesel prices after a sharp decline in global crude prices, the party said it would be "absolutely wrong to link the deregulation to the reduced diesel price."

"Given the volatility of crude oil prices in the international market, the rise in prices of crude oil is much more than the occasional drop. After deregulation when the international prices rise, there will be a consequent increase in the prices of diesel in India," it said.

It asked the government to restore the administered pricing mechanism and a cost plus pricing method which would lower the domestic price of petrol and diesel.

On the gas pricing issue, the CPI(M) said the Modi government has not accepted UPA-II's "faulty prescription" for doubling the prices but raised it to $5.61 from $4.2.

However, the government has decided to revise the prices every six months, which "raises the question whether more increases in gas prices are in the offing.

Under this system, "any increase in gas pricing means a windfall gain to gas producers and increasing burden on the people," it said.

On supply of subsidised LPG, the announcement of cash transfer scheme through banks for delivery of subsidy for the cylinders would "lead to the exclusion of a substantial section of the people entitled for the benefit" as a large number of them "still do not have access to banking services despite the much touted 'jan dhan yojana'," it said. 

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