By IANS
New Delhi : The Communist Party of India-Marxist (CPI-M) Sunday said if the central government raises fuel prices, it would lead to a political imbroglio. It should instead cut taxes on crude oil to offset losses to oil marketing companies (OMCs), a CPI-M spokesperson said.
“If the government hikes fuel prices, it would lead to a political imbroglio,” CPI-M Politburo member and MP Sitaram Yechury said here.
Finance Minister P. Chidambaram said at the Davos economic meet Saturday that the government was considering a rise in oil prices.
The government should first compensate the mounting losses of the state-run OMCs from the fund accumulated by charging taxes on petroleum products, Yechury told reporters while releasing a study on agriculture here.
“The government should first compensate the OMCs from the fund gathered by levying ad-valorem tax (a tax based according to value of an item) on petro products. If this does not work, we will explore other options. We all are aware of the crude (oil) prices in the international market are moving northward, which is causing huge losses to the OMCs,” he said.
Yechury said his party would not allow the government to make profits by charging such taxes, and then transferring the burden on the common man. He said the government could not pass the burden of escalating crude prices to consumers as it would drastically affect the rural economy.