A day after the Kirit Parikh Committee called for total decontrol of petrol and diesel prices and a steep increase in LPG and kerosene rates, the Centre said the panel report would be put up before the Cabinet for a decision on deregulation of prices.
“The government will ensure that there is no steep hike, and the least burden is put on the poor. At the same time, the financial health of the oil marketing companies will have to be ensured,” Minister of State for Petroleum and Natural Gas Jitin Prasada told journalists here on Thursday.
Besides deregulation of auto fuel prices, which will result in an increase in the price of petrol by Rs. 4.72 a litre and of diesel by Rs. 2.33, the committee suggested that LPG rates be increased by Rs. 100 a cylinder and kerosene by Rs. 6 a litre.
“All I can say at this juncture is that the interest of the consumer should be kept in mind when a decision is taken on implementing the report,” Mr. Prasada said.
Officials said there was a general consensus in the Petroleum Ministry that to begin with, the government should decontrol petrol price and end the subsidy for the fuel. This view is strongly supported by the Finance Ministry, which is reluctant to carry on with the subsidy burden.
“There could be a delay in increasing the prices of petroleum products due to political compulsions, or due to the rise in the prices of grain and other food items. But petroleum prices have to be increased in the near future. This loss-making proposition cannot continue for long,” a senior official said.
Within the Petroleum Ministry, officials have discussed a moderate hike of Re. 1 or Rs. 2 a litre in diesel price.