Wrong oil pricing policy leads to inflation: Jayalalithaa

Last Updated: Fri, Feb 08, 2013 12:20 hrs

Chennai, Feb 8 (IANS) Tamil Nadu Chief Minister J. Jayalalithaa Friday said wrong economic policies of the central government was the reason for the continuous inflation.

Replying to the debate on the motion of thanks on Governor K. Rosaiah's address to the assembly, she said most of the price increase is due to the policy decisions taken by the central government and cited the pricing of oil.

"Unless the central government brings a policy change in the pricing of petrol and diesel, price rise can be controlled," Jayalalithaa said.

She said the domestic price of oil is fixed based on the international price, which is wrong, as 25 percent of crude oil is produced domestically and only 75 percent is imported.

Saying that oil prices are not arrived at after factoring the cost of imports and refining, Jayalalithaa said the prices are fixed based on import parity price, export parity price and trade parity price.

She said if oil prices are fixed based on the cost of domestic and imported crude oil, their refining cost and a stable exchange rate, people will get fuel at a cheaper rate and inflation could be controlled.

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