NEW DELHI: A hefty 25% increase in the prices of gasoline and most other petroleum products besides a 7% additional surcharge ‘on corporate income tax were announced by the govt Octl4 to raise a total of Rs 2700 crore (1 crore is 10 million) to ease the burden resulting from the Gulf crisis.

Domestic cooking gas (LPG) has been exempted from the increase effected under a “temporary Gulf surcharge” imposed to partly offset the additional burden of Rs 7,000 crore on account of the oil import bill in the wake of the skyrocketing international crude oil prices.

The price of gasoline will consequently rise from Rs 9.84 per litre to Rs 12.23 per litre in Delhi and from Rs 11.09 per liter to Rs 13.81 per liter in Madras.

The hike in gas prices in Bombay will be from Rs 10.76 to Rs 13.38 and in Calcutta from Rs 10.07 to Rs 12.53 per litre.

The Gulf surcharge will mop up an additional revenue of Rs 2300 crore in the next 6 months and the enhanced corporate income tax Rs 400 crore in the assessment year 199192, an official spokesman said.

The increased price for diesel ranges from Rs 5.05 per litre to Rs 5.42 per litre while that for kerosene varies from Rs 2.66 per litre to Rs 2.80 per litre.

The govt also lifted simultaneously all restrictions on the working hours of petrol pumps in the country imposed in June.

The govt has also decided to effect a 25% cut in petrol consumption by central govt departments and public sector undertakings. A 15% across the board cut had also recently been announced by the govt recently for all petroleum products except kerosene at the supply stage itself to all sectors of the economy barring defence.

All these revenue earning measures were decided at a recent Cabinet meeting and also after consultations with Chief Ministers who attended the just concluded National Development Council meeting, an official spokesman said.

In a radio interview, the Finance Minister, Prof Madhu Dandavate, announced that the govt would review the need for withdrawal of the gulf surcharge when prices showed a downward trend.

The govt was compelled to take these steps as it was sure that the IMF would not extend any oil facility as in 1974, Prof Dandavate said.

While the Gulf surcharge is expected to generate the rupee resources, Indian Oil Corporation needs to import oil, the price of which has shot up from Rs 260 per barrel to Rs 590 per barrel now. The corporate income tax levy is to make up the additional expenditure incurred in evacuating Indians from the Gulf.

India, an official spokesman said, was in touch with friendly govt’s and multilateral institutions with regard to possibility of additional financing to raise more resources to offset impact of the Gulf crisis.

The govt also directed state govt’s to strictly monitor and take strongest possible action to prevent any adulteration of petrol and diesel with kerosene in view of the wide differential in the existing prices because of the higher subsidy of kerosene.

The govt made special appeals to industrial units to conserve oil and not raise the prices of products by taking undue advantage of the situation and asked trade unions and associations not to resort to any agitational approach at this critical juncture.

While stating that prices of petrol and diesel were still lower in India than international prices, the govt appealed to the people to exercise the maximum restraint in national interests.

Oil officers end stir

NEW DELHI: Oct 14, the striking Oil Sector Officers’ Association has decided to withdraw even the work-to-rule agitation that was originally scheduled to last till Oct 22.

An oil industry spokesman said here that this was mainly done to avoid inconvenience to the public.

Petrol, diesel and other petroleum products would be made available within the next 24 hours and the position would return to normal, he added.

Article extracted from this publication >> October 19, 1990