Advertisement

HindustanTimes Fri,18 Apr 2014

Get ready for LPG, diesel price hike

Saubhadra Chatterji and Zia Haq, Hindustan Times  New Delhi, May 24, 2012
First Published: 00:15 IST(24/5/2012) | Last Updated: 01:26 IST(24/5/2012)

After Wednesday’s hike in petrol prices, the government could raise diesel and domestic cooking gas prices next, as it struggles to tighten its fiscal belt.

The chairman of the Prime Minister’s Economic Advisory Council C Rangarajan has suggested a diesel price hike of R4 a litre and charging of cooking gas at market prices beyond four cylinders a year. 

Advertisement

Currently, the government pays a subsidy of Rs. 480.50 on every household LPG cylinder. If this subsidy were to be withdrawn, each LPG cylinder could cost upwards of Rs. 800.

A further round of fuel price hike will fan prices of most goods, even as retail inflation for April stood at 10.36%.

In a letter to some key ministers, including those in charge of petroleum, finance and food, Rangarajan said whittling down petrol and diesel subsidies could save the government Rs. 40,000 crore annually.

The letter however did not seek a revision of kerosene prices, a fuel used mainly by the poor. Arguing against raising fuel subsidy bill further, Rangarajan sought “immediate action” to bring it down.

Faced with bulging granaries and inadequate storage capacity, Rangarajan has also suggested paring down stocks of state-held foodgrains through additional allocation to the needy, open-market sale and exports.

Food minister KV Thomas on Wednesday said his ministry agreed to Rangarajan’s proposals but a final call would likely be taken by an empowered group of ministers next week.

Additional food handouts at the government’s expense — about 10 million tonnes — will, however, cost the government about Rs. 13,000 crore, according to his calculations.

Rangarajan also suggested export of two million tonnes of wheat from the government account and sale of three million tonnes in the open market.
http://www.hindustantimes.com/Images/Popup/2012/5/24_05_12-metro11a.jpg

Advertisement
more from Business

Rajat Gupta to surrender on June 17 in insider trading case

Gupta was convicted in June 2012 on securities fraud and conspiracy charges for having fed tips, from Goldman board meetings in the second half of 2008, to longtime friend Raj Rajaratnam, founder of the Galleon Group hedge fund firm.
markets
Advertisement
Most Popular
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved