Hinting that a hike could be imminent, Prime Minister Manmohan Singh, on Saturday, favoured a rationalisation in fuel prices while pointing out that there was a need to ensure that the poor and needy were shielded from the effects of such an exercise.

Dr. Singh voiced his opinion while addressing a function to dedicate to the nation the Rs.21,500-crore Guru Gobind Singh Refinery, a joint venture between Hindustan Petroleum Corporation Limited (HPCL) and the Singapore-based Mittal Energy Investment Pte Ltd, which is a subsidiary of the Lakshmi N. Mittal group.

The Prime Minister said that the challenges faced on the energy front were formidable as the country needed adequate supplies of energy at affordable prices. “Domestic sources of crude oil and gas are inadequate to meet the growing demand of our rapidly expanding economy. With imports accounting for about 80 per cent of our crude supplies, the spiralling prices of crude in the international market have put a severe strain on our import bill,” Dr. Singh said adding that to insulate the common man from the impact of rising oil prices, the government shouldered a sizable portion of the burden by pricing diesel, kerosene and domestic LPG below their market prices.

As he sounded a caution that there was no room for inefficient and wasteful usage of fuel, Dr. Singh advocated the need for rationalising fuel prices and emphasised the need to adopt better technology for ensuring efficient conservation of resources.

Speaking earlier, the Union Minister for Petroleum and Natural Gas, S. Jaipal Reddy, said that the crude oil import bill had crossed the Rs.10,000 crore-mark in 2010-11. Minister of State, RPN Singh, pointed out that public sector companies were shouldering combined losses of Rs.1.40 lakh-crore by providing diesel at Rs.15 less for every litre than the market price, Rs.32 less per litre of kerosene and Rs.515 less on every cylinder of LPG.

The effort by the Prime Minister and his colleagues to build a case in favour of a fuel price hike is interesting as Punjab's ruling Akali Dal, had already announced its decision to oppose any hike in prices of diesel arguing that it would adversely impact the farm and transport sectors. There was an interesting verbal duel between Dr. Singh and Mr. Badal, with the latter sparing no accolades like “desh de mahan neta” to influence the Prime Minister to make some announcements, while he continued his anti-Centre rhetoric. On his part, Dr. Singh defended that the UPA had always stood by Punjab's side, which had been the torch-bearer of the Green Revolution that contributed to the nation's food security. He pointed out that the Guru Gobind Singh refinery could come up in a record 42 months due to the support from the Union Government. He said that with such projects and dedicated freight corridors to provide Punjab with rapid connectivity to the Eastern and Western ports, the State could once again become a hub of industry and reclaim the traditional role it played for centuries.

The Chairman of the Mittal group, Lakshmi N. Mittal, said that the capacity of the refinery would be increased from 9 million metric tonnes to 18 million metric tonnes per annum within the next five months. He said that apart from meeting the energy needs of the country, the project would ensure that Punjab became a petrochemical hub, especially in the northern region initiating major trade, commercial and ancillary industrialisation activity.

Those present on the occasion included Deputy Chief Minister of Punjab Sukhbir Singh Badal, leader of BJP's legislature party Chunni Lal Bhagat, Union Minister of State Ashwani Kumar, and Bathinda's MP Harsimrat Kaur.