KOCHI: Justifying the rising petroleum prices, Union Minister for Petroleum and Natural Gas Dharmendra Pradhan said that the rise in crude prices in international market and Covid backlash which has increased the government’s welfare and developmental commitment, have led to the present situation.
“Some component of petroleum price is coming from the tax regime. We are passing through an unusual phase due to Covid pandemic. The spending of the Union and state governments has gone up. There is a 34 per cent increase in capital expenditure in the budget. But we have to carry forward our economy and we need resources,” he told reporters here.
The minister arrived in Kochi to attend the inauguration of the Petrochemical Park at BPCL Kochi Refinery, which will be opened by Prime Minister Narendra Modi on Sunday.The minister also blamed oil-producing countries for the steep rise in petroleum prices, alleging that they are creating an artificial pricing mechanism, which is ‘pinching’ the consumer countries.
“There was a total collapse in demand for petroleum across the world due to Covid lockdown, and petroleum producers had to reduce production. Now the economy has revived and India has returned almost to the pre-Covid position. However, the oil producers have not increased production,” said Pradhan.
He said India has conveyed to the oil producers that they cannot push consumer countries this way. “The OPEC has announced a future pricing mechanism in which they have given some relief to Asian countries. They have hiked the prices for Europe and America but have spared Asian countries. But I am not satisfied with this arrangement,” said Pradhan.
Refuting charges that the government is hiking price of petrol whenever it gets a chance, he said the price had remained stable for 240 days last year. Justifying the decision to implement a Rs 6,000 crore project at BPCL Kochi Refinery ahead of disinvestment, the minister said the project will facilitate production of niche petrochemicals which are predominantly being imported in the country.