With Congress suffering electoral setbacks in the recently held Assembly polls, Petroleum and Natural Gas Minister, Veerappa Moily on Friday declared that the Parikh panel call for Rs. 5-hike in diesel and Rs. 250-increase in LPG cylinder prices will be diluted to protect the interest of the consumers.
“Economically that is the correct decision but we will have to take a view on how practical it is at this juncture to implement it. The suggestions given by the Committee are very good as they are aimed to help restore fiscal balance. If the country has to go forward, reform is a must. But the question is whether we can implement what has been recommended because we have to balance between the consumer interest and government revenue. A balanced view will be taken on the report,” he told reporters in New Delhi.
The government-appointed Kirit Parikh committee had suggested immediate Rs. 5 per litre hike in diesel, Rs. 4 per litre increase in kerosene and Rs. 250 hike per LPG cylinder. It had also suggested reducing annual entitlement of subsidised cooking gas cylinder to six from nine and phasing out diesel subsidy in one year to cut a record subsidy burden.
Diesel is currently sold at Rs. 9.9 a litre loss. It could take over one-and-half years to wipe out the Rs. 9.9 a litre loss at the current rate of raising diesel price every month by 50 paise per litre.
However, Mr. Moily said the current 50 paise per litre hike will continue irrespective of the drubbing that Congress faced in the assembly elections. “Election results will not drive UPA government or Congress to panic. Congress or UPA will not act in panic. These decisions have been taken in national interest and we will continue to act in best interest of the country and its people,” he added.
He said the decision on divesting shares at Indian Oil Corporation Ltd would be taken at an appropriate time. “The market has to behave properly. We do not want to go to the market in a way where we are going to get the right price. This is a matter where both the Finance Ministry and our Ministry will together take a call,” he added.
Further, he said the Cabinet Committee on Investments (CCI) had cleared projects worth Rs. 7,947 crore on December 9. These projects include laying and renovating pipelines of Indian Oil Corporation, Hindustan Petroleum Corporation Limited (HPCL) and Chennai Petroleum Corporation Limited (CPCL). A Rs. 2,379 crore project by state-run explorer Oil and Natural Gas Corporation (ONGC) for refurbishing surface installations and pipelines has also been cleared.
Among the projects approved by CCI is the proposed Rs. 5,200 crore LNG (liquefied natural gas) terminal project of the Gujarat State Petroleum Corporation at Mundra.