Govt should have set up fuel price stabilisation fund: WB Finance Minister

Kolkata: West Bengal Finance Minister Amit Mitra on Wednesday said the central government should have created a fuel price stabilisation fund to counter the soaring prices of petrol and diesel in the country.

Mitra told the Bengal Chamber annual general meeting here that there is deep concern in many quarters on what the Indian economy is doing at "certain dangerous levels".

"Fuel prices are climbing everyday, the rupee is plummeting and this is impacting the current account deficit, which is hitting dangerous levels," he said.

"When crude oil prices were low that was the time to create a fuel price stabilisation fund, which was not seized upon," Mitra added.

The Centre could have also boosted its fuel reserves with the Indian Strategic Petroleum Reserves Ltd, when crude prices were at USD 33-per-barrel level, he said.

"Could they not have developed it further? Chances are they did not..." he said.

Mitra's comments came a day after West Bengal Chief Minister Mamata Banerjee announced that her government will slash the rates of petrol and diesel by one rupee per litre.

Rajasthan and Andhra Pradesh, too, have cut fuel prices.

Since mid-August petrol price has risen by Rs 3.79 a litre and diesel by Rs 4.20 per litre.

On the depreciation of the rupee, Mitra said it hikes import costs and leads to inflationary pressure.

"Inflationary pressure prompts the Reserve Bank of India to raise the benchmark interest rate (repo rate), which means, among other things, EMIs get costlier and viability of current projects come under question," he said.

About West Bengal, the finance minister said the state government is keen to increase exports and has set a target of at least USD 15 billion in shipments in the next few years.

"We would ideally like to double the export figure of USD 9.15 billion achieved in 2017-18 by 2020-21," Mitra said.