Saturday, May 21 2005 10:36 Hrs (IST) - World Time -

New Delhi: Finance Minister P Chidambaram yesterday (May 20, 2005) hinted at revision in petroleum prices saying consumers should bear "slight" burden of the surging global oil prices.

"We have not taken any decision in this regard. We are looking for ways to distribute burden (of international oil price increase) between Government, oil marketing companies and refineries. But sometimes circumstances are out of our control," Chidambaram said in an interview to CNBC-TV 18's Hindi channel Awaaz.

Stating that no Government would like to hike petroleum prices, he said raising prices depends on factors, which are beyond Government's control.

On the Left parties' opposition to the price revision, Chidambaram said the options suggested by the Left could neutralise 50 per cent impact of the hike of the global oil price but who would bear the remaining burden.

The increase in prices would lead to fall in use of oil, which would then result in decreasing prices. "We will control the situation. There is no need to worry. First of all right economic decisions has to be taken and then its impact has to be lessened as per the political need."

He pointed out that the country had to buy crude oil on an average at $ 28 per barrel in 2003-04, which shot up to $ 39 the very next year and $ 51 in the beginning of this fiscal.

"The country does not have adequate petroleum resources and is compelled to buy 75 per cent from abroad for which prices are not determined by us," the Finance Minister said.

Chidambaram ruled out setting up of a super regulator. He said the institution is possible only in small countries. "Ours is a big country. We can't have super regulator for banking, pension, insurance and capital market."

On interest rates, he said he expects that they will be at the 'right' level and inflation under control.

He said so far as the impact of supply and demand of money on interest rates is concerned, it seems that rates will not witness any change.

The Finance Minister said fixed interest rates of Public Provident Fund (PPF) is not prudent economically. "We have told trustees to explore better ways of investment. PPF should give that much interest rates which they can afford," he said.

On Fringe Benefit Tax (FBT) he said the Government was imposing nominal tax on fringe benefit of companies, which will burden them by just 1 to 1.5 per cent.

He said small businessmen would not be affected by FBT.

On Money Transaction Tax he said it is one of the ways to curb black money. Besides, Anti-Money Laundering Legislation and Financial Intelligence Unit would check the supply of black money.

"By July 31 annual information returns have to be submitted which will give us proof as to who is buying expensive property and goods," he said.

He said there is a scope for increasing Foreign Direct Investment (FDI) by three times. "We get only one-tenth of what China gets," the Finance Minister said.

On disinvestment, he said the proceeds do not come in the budget and are deposited in a fund. As such the time schedule of investment does not have any consequences.