New Delhi: A rollback in the steep Rs 1.80 a litre hike in petrol price is unlikely, government sources said on Saturday.

"As of now there isn't much political heat. The rollback looks unlikely," said a source.

Meanwhile, hitting out at the ruling the UPA alliance partners such as the Trinamool Congress, who have denounced the hike and threatened to withdraw support from the government, a Cabinet Minister said, Mamata Banerjee was part of the Empowered Group of Ministers (EGoM) that in June of 2010 had decided to deregulate or free petrol prices.

"She (Mamata Banerjee) had not attended that EGoM meeting of June 25, 2010, but her consent was taken. She continued in the Union Cabinet after the decision was made and did not threaten even once to withdraw support," the minister said, adding that the decision to hike petrol price was in line with the empowerment that government has given to oil companies last year.

"She (Mamta Banerjee) is a compulsive populist. When we have alliance like them we don't need opposition BJP," he added.
Sources said the state-owned oil companies took the decision to hike prices on their own and were not required to consult anyone in the government.

They added that the government does not want to become unpopular, but sometimes it is forced to take unpopular decisions. "It is not that the government is running for Nobel prize for unpopularity. Government does unpopular things only when it becomes inevitable." said a source.

The oil companies were forced to hike the petrol price because of the double whammy of high oil prices and the rupee's depreciation against dollar, making imports costlier.

The government sources, meanwhile, accused Mamta Banerjee and BJP of being hypocrites, saying that they were pocketing incremental revenues in states ruled by them.

West Bengal has sales tax of 26 percent ad valorem, while Congress ruled Delhi have 20 percent VAT.

"If she (Mamata Banerjee) is so concerned why not reduce sales tax in West Bengal to Delhi levels", a source said adding that a similar story is being repeated in seven states ruled by BJP.

The Central government had earlier this year cut customs duty and excise duty on both crude oil and petroleum products to sacrifice Rs 49,000 crore of revenues. There is no central tax left on the auto fuels apart from Rs 2 per litre levy for highway construction.

"While BJP has accused us of midnight deceit they are perpetuating day light robbery as every time fuel prices go up states pocket gains because of ad valorem nature of local sales tax." the source said.

Pranab to explain need for petrol price hike

A day after the Prime Minister ruled out any rollback in petrol prices, Union Finance Minister Pranab Mukherjee said he will explain the reasons behind the hike and expressed hope that the differences with ally the Trinamool Congress on the issue would be mended soon.

"So far as oil prices are concerned, I will later explain why the oil marketing companies had to take this step," he told reporters at his residence here.

On TC's threat to walk out of the coalition on the issue, he said, "I have come to know that our valued partner (TC) is aggrieved. They will meet Prime Minister Manmohan Singh and I hope the issue will be resolved."

TC chief Mamata Banerjee had yesterday slammed the Centre for increasing petrol prices without taking UPA allies into confidence.

The party had adopted a resolution to quit the coalition on the grounds that it was kept in the dark and its ministers were not informed of vital issues.

 "What is the importance of remaining in the ministry if we are not heard and silenced in the cabinet," the resolution said.
Banerjee later modified the resolution and said TC would seek an appointment with the Prime Minister when he returns after attending the Cannes G-20 summit.

Besides TC, other UPA allies like the DMK and NCP have also condemned the petrol price hike.