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Union Minister Nitin Gadkari has said that subsidising petrol and diesel to bring down their retail prices will take money away from government’s social welfare schemes, according to an Indian Express report.
Gadkari said that the increase in oil prices is “unavoidable” as India is now linked to the global economy.
“This is an unavoidable, economic situation. It is directly linked to the global economy. If we have to sell it (petrol/diesel) cheap, it means we will have to buy it at higher prices and subsidise it here,” Gadkari told the newspaper on May 23.
“If we subsidise that, all the money from our social security schemes will vanish,” he added.
The union minister said that money may have to be taken away from irrigation schemes, free LPG for villages scheme, rural electrification project, Mudra scheme and other Central schemes.
“Now there is a health insurance scheme planned for 10 crore families. There is the crop insurance scheme. We have only a limited amount of money. So if we subsidise (petrol/diesel), toh gadbad ho jaayega [that would create issues],” he stressed.
When asked whether taxes levied on petroleum products should be cut to bring prices down, Gadkari explained, “That is the foundation of the economy. If anything has to be decided on that, our finance minister will decide.”
Gadkari stated that the government was working on increasing use of biodiesel, methanol, ethanol and electric vehicles as alternatives.
Meanwhile, petrol and diesel prices continued to soar and touched another peak on May 24. Petrol was hiked by 26 paise to Rs 85.29 per litre in Mumbai.
This is the 11th straight hike in a row. Diesel prices on the other hand, were hiked by 16 paise to Rs 72.96 per litre in Mumbai. Petrol prices in Delhi were increased by 26 paise to Rs 77.47 per litre and diesel by 15 paise to Rs 68.53 per litre.
Brent crude futures, the international benchmark for oil prices, traded above $79.47 a barrel on the ICE.
While a reduction in excise duty is being considered, the Centre is in discussion with states to cut Value Added Tax (VAT) on petrol and diesel.