Welcoming the petrol price hike, industry body Ficci said that government should deregulate the prices of other fuel products like kerosene, diesel and cooking gas.
In the steepest ever hike, petrol price was increased today by Rs 7.54 a litre with effect from midnight tonight.
"However, this increase, welcome as it is, will only partially cover the under recoveries on account of kerosene (Rs 31 per liter), diesel (Rs 13.64 per liter) and Rs 479 for each cylinder of LPG. It is time that government allows these prices also to move to their market-determined level," it said in a statement.
It said the argument that kerosene is used by the poor is no longer valid as experience has shown that its greatest use is unfortunately in fuel adulteration.
"Rationalisation of petroleum products prices will provide the necessary incentives for the development of alternative and renewable sources of energy, encourage conservation and more important improve the fiscal balance," Ficci said.
The chamber said the inflationary impact of such an increase is once for all and therefore transitory.
"The increase had perhaps become inevitable with the continued slide in Rupee's exchange rate," it said, adding "it can be mitigated by reduction in taxes both by the central and state governments".
Ficci hoped all political parties will support the move towards the rationalisation of the entire spectrum of petroleum prices.