Against Deregulation of Diesel Prices

 

 

 

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

 

 

The CPI(M) condemns the deregulation of diesel pricing. 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 deregulation has been announced along with a reduction in the retail price of diesel following a sharp decline in the price of crude oil in the international market. However, it is 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.

 

The Modi government has completed the dismantling of the administered pricing mechanism 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.

 

The CPI(M) demands that the government restore the administered pricing mechanism and a cost plus pricing method which will lower the domestic price of petrol and diesel.

 

 

The Modi government has not followed the UPA government in accepting the Rangarajan Committee faulty prescription for doubling of the gas prices. It has increased the price of gas to $ 5.61 from the existing $ 4.2. However, it is reported that there is a provision for premium for gas explored from deep-sea fields and for revision of prices every six months. This raises the question whether more increases in gas prices are in the offing.

 

The CPI(M) reiterates that the pricing system should not be based on the average of prices ruling in international hubs without any reference to the domestic cost of production of gas. Under this, any increase in gas pricing means a windfall gain to gas producers and increasing burden on the people.

 

 

The announcement of cash transfer scheme through banks for delivery of subsidy for LPG cylinders will lead to the exclusion of a substantial section of the people entitled for the benefit of the LPG subsidy. A large number of ordinary people still do not have access to banking services despite the much touted “jan dhan yojana”.