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Fuel pricing to be reviewed in June: Govt source

business Updated: May 18, 2010 16:36 IST

The government will review its fuel pricing system next month and may allow state-run firms like Oil and Natural Gas Corp to gradually raise the price of natural gas to level charged by Reliance Industries, a top government official said.

A panel of ministers headed by Finance Minister Pranab Mukherjee would meet in the first week of June to consider changes in the system in which the government sets the price of petrol, diesel, cooking gas and kerosene, the official, who did not want to be identified, told reporters.

The panel is expected to consider the report of an official committee that said petrol and diesel should be deregulated, while state-set prices of kerosene and cooking gas should be raised.

"It is listed in the agenda for the next cabinet meeting," the official said, referring to a possible increase in gas prices sold state firms.

The government has approved a price of $4.2 per million British Thermal Units for natural gas sold by Reliance Industries, but state firms are allowed to charge less than half of that rate. For a Factbox on India's subsidised natural gas sector.

"The plan is to gradually raise (administered) prices to $4.2 per mBTU," the official said.