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May 24, 2012, 05.31 PM IST | Source: IBNLive.com

Petrol price hike: Congress asks its states to cut tax

Under pressure from its allies, the Opposition and the public over the steep hike in petrol price, the Congress has asked all its state governments to cut taxes on fuel prices.

Under pressure from its allies, the Opposition and the public over the steep hike in petrol price, the Congress has asked all its state governments to cut taxes on fuel prices. The move comes after the Opposition made it clear that it would launch nation-wide protests over Wednesday's Rs 7.50 hike in petrol price.

If the Congress-ruled states follow the diktat, the states that are likely to benefit are Delhi, Haryana, Kerala (coalition), Manipur, Rajasthan, Uttarakhand, Maharashtra (coalition), Arunachal Pradesh, Mizoram, Jammu and Kashmir (coalition), Andhra Pradesh, Meghalaya, Assam, West Bengal (coalition).

Reports say that the Uttarakhand government has already announced a tax cut.

The Opposition is fuming, demanding a rollback. The NDA has called for a nationwide bandh on May 31. The Congress termed the NDA's move 'misleading'. Congress leader Rashid Alvi said, "It is a very difficult decision taken by oil companies. The companies are compelled to take such decisions due to a rise in the dollar. The NDA should not misguide the country by going on a strike, they know the situation of the country."

The Left parties are planning to hold a protest demonstration in Delhi. CPI leader D Raja said, "All parties should plunge to protest. It's just a prelude. They will hike the price of diesel as well."

Apart from West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee, most of the UPA allies have sided with the government on this one.

"We have made a commitment to support this government, that is the reason we are not moving out. But our support does not mean that we cannot protest. We believe that the government is being unjust, it's one sided and not correct," Mamata said.

The dawn-to dusk hartal called separately by LDF and BJP in Kerala to protest the increase in petrol price partially affected normal life across the state on Thursday.

Tamil Nadu Chief Minister J Jayalalithaa also demanded an immediate rollback of the hike.

In Delhi, petrol pump owners sought additional security fearing violence. Many pumps also put a cap on sales. Public anger over the decision was evident, with protests in many cities.

While the Congress grapples under pressure over the petrol price hike, a hike in diesel prices is also on the cards. Sources say the Empowered Group of Ministers (EGoM) will meet on Friday to discuss a possible hike in diesel and LPG prices too.

Sources also say that oil companies are pushing for a Rs 5 hike in diesel prices.

The increase was on the cards with the rupee continuing its free fall against the US dollar. The rupee fell to a record life low of 56 per dollar on Wednesday.

In Delhi, petrol now costs Rs 73.14 while Hyderabad pays one of the highest rates at Rs 81.44.

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