The council has questioned the very basis of centre's arguments to justify the hike, widely publicised through huge advertisements in a large number of newspapers -- again at the cost of public exchequer.

(The advertisements titled `Why diesel price hike?' were published around October 23.)

According to council president VK Saxena, the advertisement divulged only half information, concealed many other vital information and it amounted to misleading the people on several counts.

The council, serving the consumers' right to transparency and fair play for the last ten years, questioned the advertisement for citing only Dubaicrude oil prices whereas the oil refineries blended Dubai crude with Brent and indigenous crude in almost equal ratio.

Talking to The Financial Express, he pointed out that the sole objective of MoPNG/OCC levying Product Price Adjustment (PPA) is to absorb the price increase without passing the same to the consumers.

The levy ranged from Rs 250 to Rs 600 per kilolitre on regulated products, that is MS, HSD, ATF, SKO on public distribution system and LPG (domestic).Saxena said that NCCL wished to reply to the centre's alleged one-sided propaganda through the same scale of counter-advertisements but for the former's incapacity borne out of a meagre budget.

He questioned each point raised in the centre's advertisement.

While the government advertisement claims that the international price of crude oil went up between February and September 1999 from Rs 3,210 to Rs 7,020 per metric tonne (119 per cent), NCCL counters that when the average procurement price is $15.11 per barrel, the Freight On Board (FOB)cost of crude oil comes to Rs 4,818 per metric tonne.

Quoting informed sources for the April-August period, he said, the average crude oil procurement price by refineries comes to $15.11 per barrel - by taking a mean of $16.614 per metric tonne sourced from Dubai, $17.164 from Brent and $11 from indigenous sources.

Since the PPA was charged on the regulated products, he said, the increased cost of crude oil should be absorbed in this account itself. He said the centre should encourage hedging of products when the prices are the lowest in the international market.

According to his knowledge, Saxena said, the price hike was all the more unwarranted as the refineries were working at more than 100 per cent utilisation. In the past too, he recalled, the prices of some of the products were not increased commensurate with the increase due to increase in the crude prices.

The resultant losses to the oil companies were compensated by higher increase in the prices of other petroleum products through PPA accountSaxena said it was also about time the centre increased indigenous crude production.