India: Petroleum Minister Consults With Political Parties
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Wednesday, 10 February 2010 |
Petroleum minister Murli Deora started consultations with political
parties, including partners in the UPA government, for an increase in
fuel prices ahead of presenting the proposal to the Union Cabinet.
Deora is reported to have discussed the issue with telecom minister and
a senior leader of UPA ally DMK, A Raja, who is reported to be
non-committal and is believed to have shifted the onus of any decision
to party chief and Tamil Nadu chief minister M Karunanidhi.
With the petroleum ministry seeking implementation of the Kirit Parikh
panel recommendation of freeing petrol and diesel prices, the Congress
core group is also meeting later in the day to discuss the report on
fuel pricing reforms. Already, there seems to be a consensus that the
proposed price hike should, as far as possible, spare LPG and kerosene
as it would directly affect households hit hard by rising prices of
essential commodities.
The Kirit Parikh committee has recommended an increase of Rs100 per LPG
cylinder and Rs6 per litre of kerosene. The current subsidy burden per
cylinder of LPG is Rs287, the panel had pointed out while presenting
the report. For petrol and diesel, the panel had suggested increases of
Rs4.72 and Rs2.33 per litre, respectively.
In fact, the Kirit Parikh panel report has recommended complete
deregulation of petrol and diesel prices. The government is likely to
implement the panel's report with modifications, lifting price controls
on petrol and diesel and moderating hikes in the prices of politically
sensitive prices of cooking fuels.
Freeing fuel prices would help state-run oil marketing companies to
mark product prices to global prices of crude oil while it would also
give private oil marketing companies a level playing field with
state-run oil companies that sell fuel at a subsidy.
PetrolWorld India 100210
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