The Hindu : National : No hike in prices of LPG, kerosene, fuel

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Friday, Oct 12, 2007
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No hike in prices of LPG, kerosene, fuel

Sujay Mehdudia

NEW DELHI: Putting to rest speculation about hike in the prices of domestic Liquefied Petroleum Gas (LPG) and kerosene, along with that of petrol and diesel this year, the Union Government on Thursday approved a “financial package,” including issuing of Rs. 23,457-crore worth oil bonds and extending the subsidy scheme on LPG and kerosene for another three years.

“As per the directions of Congress president Sonia Gandhi not to burden the common man and the assertion of Prime Minister Manmohan Singh to find an alternative to hiking prices, we kept the interests of the aam aadmi in mind and have not passed on the burden of surging crude oil prices in the international market on to the consumer,” Petroleum and Natural Gas Minister Murli Deora said after the Union Cabinet meeting.

Sonia’s directive

Highly placed sources said that Ms. Gandhi issued directions to political secretary Ahmed Patel and Mr. Deora that there should be no hike in the prices of LPG, kerosene, petrol and diesel.

“The directions were that under no circumstances the poor or the common man should be financially burdened,” the sources added.

During 2007-08, the estimated under-recoveries of the Oil Marketing Companies (OMCs) would be Rs. 54,935 crore.

Of this, 42.7 per cent or Rs. 23,457.24 crore would be borne by the government.

Another one-third to the tune of Rs. 18,000 crore would be borne by the upstream public sector units (PSUs) including the Oil and Natural Gas Corporation, the Gas Authority of India Limited and the Oil India Limited.

The rest of the burden would be shared by the OMCs.

The Cabinet also decided to extend budgetary subsidy on the domestic LPG and public distribution system kerosene for three more years from April 1, 2007.

The Government was providing Rs. 2,680 crore from the budget to subsidise the mass-consumed cooking fuels, Mr. Deora said.

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