Monday, May 2 2005 19:10 Hrs (IST) - World Time -

New Delhi: The Government will hold another round of talks with Communist Party of India (CPI) on the proposed hike in prices of petroleum products after today's (May 2, 2005) inconclusive discussions.

"No decision was taken at the today's meeting (on the issue of proposed increase in petroleum prices). We will meet again," CPI general secretary A B Bardhan said, after a 30-minute meeting Left party leaders had with Minister of Petroleum and Natural Gas Mani Shankar Aiyar.

While CPI is not in favour of any hike in prices, it suggested measures to cushion the impact of rising prices of crude on the profitability of public oil companies.

"We suggested that excise and customs be brought to zero, refinery charges, which are highest in India, be brought down and proposed 50 paise cess on diesel and petrol for development of highways be reviewed," Bardhan said.

The Ministry was of the view that these measures would be inadequate, as crude prices account for 75 per cent of the cost of products. It also told CPI leaders that unless prices of petroleum products are hiked, the oil companies will have to take a hit of Rs 37,000 crore.

CPI's main opposition to the increase in prices of diesel was that it would fuel inflation. "They (Petroleum Ministry) said that the inflation would go up just about 0.5 per cent but we feel that the figure would be higher," Bardhan said.

He said that the party was assured by the Minister that the Government was not considering hike in prices of kerosene while it has not firmed up its views on increase in prices of LPG.

CPI said that with increase in petrol price hike, two-wheelers and auto rickshaws would be sufferers. Bardhan said that the party also suggested that proposed cess of 50 paise be reduced.

To prevent leakages in the system, party leaders S Sudhakar Reddy and D Raja said that the Government should make efforts to prevent misuse of kerosene for adulteration of auto fuels.

"The Government has already got a scheme for the purpose approved from the cabinet. Petroleum companies should bear its cost," they added.