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When prices of crude oil were falling, where was the need to hold meeting of empowered group of ministers

A day before prices of crude oil had fallen by 5 per cent, so decision of increasing oil prices not logical
Increase in oil prices to hit already burdened poor and middle classes badly
Hon’ble Chief Minister Ms. Mayawati ji writes letter to Prime Minister, requests him to withdraw price hike

The Hon’ble Chief Minister of Uttar Pradesh Ms. Mayawati ji has requested the Prime Minister Sri Manmohan Singh through a letter send today that in the light of countrywide opposition of hike in the prices of petro products it would be apt to abolish the Central Excise Tax being charged on diesel currently and the hike effected in the prices of diesel, kerosene and LPG should be withdrawn immediately.

In her letter, the Hon’ble Chief Minister ji said that the Central Government effected hike in the prices of diesel, kerosene and LPG from the mid-night of 24/25 June 2011. She said that it had resulted in the rise of the prices of these
products by Rs. 3 per litre (diesel), Rs. 2 per litre (kerosene) and Rs. 50 per cylinder (LPG). She said that the consumer
would be further burdened by this increase and the hike in the price of diesel would result in the rise in the prices of essential commodities of daily use as the transportation cost of goods would increase. She said that the farmers would be adversely hit by this hike and they would not be compensated for it. She said that this hike would badly hit the  already burdened poor and middle classes.
The Hon’ble Chief Minister ji, in her letter written to the Prime Minister, drew his attention towards the statement of the
Union Petroleum Minister given at the time of price hike. She said that the Petroleum Minister said that the oil  companies would face a deficit of Rs. 1,70,000 crore during the year 2011- 12. The Central Government has claimed that by decreasing the taxes, the oil companies had been compensated by Rs. 49,000 crore and through this price hike it had compensated them by Rs. 21,000 crore. She said that had the Central Government abolished the central excise tax on these products then the Rs. 21,000 crore deficit would have been compensated and the need to hike the prices of these products would not have risen.
Questioning the need of increase in the oil prices, the Hon’ble Chief Minister ji said that Union Petroleum Minister, during his press conference mentioned that the crude prices had risen to 113 American dollars. She said that when the EGOM met to decide hike in the petroleum prices, the crude prices in the international market were coming down during the past few months. A day before the meeting, when the EGOM had been discussing hike in the prices of petro products, the prices of crude had registered 5 per cent decline. Yet, the EGOM decided to increase prices, which does not seem logical.
Hon’ble Ms. Mayawati ji in her letter has also referred that UPA Government, from the financial year of 2005-06 to 2010- 11, had given a concession of more than Rs. 31 lakh crore to corporate world. She said that during the year of 2010-11 about Rs. 4.61 lakh crore concessions in taxes had been given to corporate world, while Rs. 21000 crore would be gained from the increase in prices of diesel, cooking gas and kerosene oil on 24 June 2011. She said that in this way common man was suffering from the burden of price hike in place of corporate world which was being benefited. This is not proper and appropriate in view of financial management. Hon’ble Ms. Mayawati ji in her letter has also apprised the Prime Minister that in the union budget of 2011-12, the Central Government had shown Rs. 1,44,914 crore as Receipt Budget, which has not been realised. She said that if the Central Government could realise some of the amount by its efforts, then the poor and middle class consumers could be saved from the burden of oil companies’ losses.
Hon’ble Ms. Mayawati ji said that Central Government had also appealed to the State Governments through the newspapers while increasing the prices that the same could control this price hike by reducing the taxes at their own level. In this connection, she has drawn the attention of the Prime Minister that the State Government has already taken effective steps in this direction by reducing the rate of tax from 21 per cent to 17.23 per cent when the Central Government had raised the prices of petroleum products in the financial year of 2008-09 and completely finished 04 per cent tax on domestic LPG. She said that owing to this reduction in the taxes of both these commodities, the State Government was suffering from the burden of Rs. 1000 crore yearly loss at present.
Hon’ble Ms. Mayawati ji said that whenever the U.P. Government demanded any package from the Centre for the development of the State in view of lack of financial resources, it was being rejected or insufficient package was given. She said that owing to reduction in Central sales taxes, the State Government suffered revenue loss in 2007-08, 2008-09 and 2009-10 and it requested for the subsidy of Rs. 2500 crore from the Centre, but the Central Government had given only Rs. 118.87 crore grant. She said that in other States, especially Congress ruled States claims had been accepted by Central Government as demanded by them. Similarly, the amount of subsidy is not being given to the State Government for various Central Projects like — backward class scholarship and central road fund etc. Besides, the Central Government is not providing funds for the upkeep of national highways and the assistance being provided under Pradhan Mantri Gramin Sadak Yojana was also not being released. Likewise, the prices of bitumen had also increased by one and a half times and the State Government was bearing it.
The Hon’ble Chief Minister ji pointed out in her letter that the tax rate on diesel in U.P. was lesser than the states of
Maharashtra, Madhya Pradesh, Tamil Nadu, Andhra Pradesh, Kerala, Uttarakhand, Gujarat, Bihar, Jharkhand, Rajasthan and Karnataka etc. She said that in this light there was no scope for the State Government to further decrease the tax rate on diesel.

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