Communist and Marxist against Oil price hike

Opposing any move to hike petrol prices, the Communist Party of India (Marxist) on Wednesday asked the government to impose a ‘windfall profit tax’ on private and joint venture oil firms as well as private refineries and not burden the common people.

“In no case can the UPA government pamper the private oil companies to make windfall profits and, at the same time, increase the price of petrol and diesel and burden the people further when they are suffering from steep price rise of essential commodities,” CPI(M) Polit Bureau said in a statement. The CPI also opposed any move of the government to increase prices of petroleum products.

It recommended the imposition of ‘windfall profit tax’ on private and joint venture oil-producing firms as well as private standalone refineries “earning huge profits through import parity policy of pricing.” With crude prices exceeding $100 per barrel, “it is necessary that windfall gains be recovered from all private and joint venture oil-producing companies like M/S Cairns, Reliance, Essar etc. extracting oil and gas in India,” the statement said.

It added that when these contractors participated in the New Exploration Licensing Policy, “none of them could have envisaged crude prices beyond $30 a barrel.”

“It would be a failure on the government’s part to allow upstream contractors additional gain of $70-80 per barrel without any extra work,” the party said, adding that many other countries had renegotiated their contracts with a threat of imposing windfall taxes on such profits.

“It is time that the government takes charge and recovers unintended gains from upstream contractors,” it said. The CPI(M) said private refineries were allowed “to keep margins for refining cost exceeding $15 USD per barrel, while public sector firms struggled to meet their financial needs.”

CPI National Secretary and MP D. Raja said any hike in prices of petrol and diesel would break the backbone of common people who are already reeling under the burden of runaway inflation and high prices of essential commodities.

He reiterated the demand of the Left parties for rationalisation and restructuring of excise and customs duty on petrol and diesel which were as high as 32 and 54 per cent respectively.

Mr. Raja said instead of hiking prices of petroleum products, the Finance Minister should tax the corporate sector.