Mamata may oppose proposed fuel hike

Jun 25, 2010 - Age Correspondent |

New Delhi

The empowered Group of Ministers (eGoM) on decontrol of fuel prices, which is meeting on Friday could possibly face strong opposition to any fuel price hike from the railway minister Mamata Banerjee, if she decides to attend it.
After skipping the first meeting of the eGoM, Ms Banerjee is expected to attend the second meeting on the issue. The railway minister, who is working furiously to fulfil her long dream of unseating Left from the West Bengal, is against any measure which is seen anti-poor. According to sources close to Ms Banerjee, she doesn't want to be seen a party to any fuel price hike decision.
The petroleum ministry is pushing for the decontrol of petrol prices, which could push up its price by Rs 3.73 per litre and a small hike in diesel prices. Planning Commission and to some extent finance ministry is also in favour of hike in the prices of the petrol and diesel.
The PSU oil marketing companies, which are selling petroleum products at less than market prices, are expected to lose Rs 74,300 crores in case there is no hike in the prices. This will put a large fiscal burden on the finance ministry to compensate these oil companies, something which the latter is reluctant to do. The high losses will also eat into the revenue of over Rs 1 lakh crore generated through the auction of spectrum.
However, what has made the decision to decontrol fuel price more difficult for the government is that the inflation in May crossed double digits and any fuel price increase at this juncture will make the lives of people more difficult.
The first meeting of the eGoM which took place two weeks back had failed to reach to any conclusion as a majority of members were absent.

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