Govt may not hike diesel, LPG prices

Date yet not fixed for meeting of a ministerial panel to decide on revision

PTI | May 28, 2012



Still battling the fallout of last week's steep Rs 7.54 a litre hike in petrol price, the government on Monday said it is not considering raising rates of diesel, domestic gas (LPG) and kerosene for the moment.

"We are not considering hike prices of diesel, domestic LPG and kerosene. It is out of question right now," Oil Minister S Jaipal Reddy told reporters after a meeting called by Finance Minister Pranab Mukherjee to discuss the impact of fuel price hike on inflation.

Chief Economic Adviser Kaushik Basu was also present at the inter-ministerial grouping on inflation.

Reddy said no dates have yet been fixed for convening a meeting of a ministerial panel to decide on revising rates of diesel, LPG and kerosene.

The Empowered Group of Ministers (EGoM) on fuel prices, headed by Mukherjee, hasn't met since June last year even though depreciation in the rupee and rise in international oil prices have raised the cost of imports.

"It was only a meeting of the inter-ministerial group to look at the question of inflation. I was requested to come and offer my insights before they finalise their group recommendations," Reddy said.

"I focused on the price of diesel and its impact on inflation as a whole," he said without elaborating. "No date has been fixed for EGoM on diesel price deregulation."

The EGoM had in June 2010 taken an in-principle decision to deregulate or decontrol diesel prices but its implementation was deferred.

"In my perception, the EGoM will not meet soon...

certainly not this month," an official said.

The government is believed to be buying time to let flared tempers cool before calling the meeting of the EGoM where the Congress party's ruling allies TMC and DMK are also represented. Both TMC and DMK have held street protests against the hike in petrol price. .

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