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Updated: June 7, 2010 16:22 IST

Plan panel favours hike in petrol, diesel prices

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Ahead of the meeting of a ministerial panel on fuel prices, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday spoke in favour of a hike in petrol and diesel rates.

“For six months, I have been saying we should...I haven’t changed my mind,” Mr. Ahluwalia replied, when asked whether this is the right time to increase fuel prices.

The Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, is meeting on Monday to consider the Kirit Parikh Committee report calling for freeing of petrol and diesel prices from government control, besides a steep hike in LPG and kerosene rates to cut the subsidy bill.

Earlier, Mr. Ahluwalia had told PTI in an interview, “India’s international economic reputation requires us to say that fuel prices are going to be linked to global prices. I think that linkage (of fuel prices with global prices) is unavoidable.”

However, he favoured providing subsidised kerosene to the poor, stressing on the need for exploring the possibility of giving direct subsidy.

State-owned Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum currently lose Rs 203 crore per day on selling fuel below the imported cost. They currently sell petrol at a loss of Rs 3.35 a litre, while that for diesel is Rs 3.49, Rs 18.82 for PDS kerosene and Rs 261.90 for every 14.2 kg LPG cylinder.

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