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Get set for petrol price hike, cooking gas cylinder quota

business Updated: Feb 02, 2010 22:23 IST
Anupama Airy
Anupama Airy
Hindustan Times
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Now, brace for a fuel price increase – mainly in petrol – and a ceiling on the number of cheap cooking gas cylinders per family. That’s just what the doctor has ordered for a revenue-scarce government which has been silently footing your bill while global oil prices have been surging since 2004.

The Kirit Parikh committee set up to recommend a fuel price policy, is due to submit its report on Wednesday, Petroleum Minister Murli Deora told Hindustan Times.

A lot will depend on how Prime Minister Manmohan Singh’s cabinet takes to balance concerns over price rise, political fallouts and the business of balancing the fiscal deficit.

"It is learnt that Parikh committee wants to completely free diesel and petrol pricing,” said a petroleum ministry official.

If the panel’s recommendations are implemented, the price of petrol, which costs Rs 44.72 per litre in Delhi, will rise Rs 4.

A government source said the panel has recommended that cooking gas at government-subsidised prices be limited to six cylinders per family (per annum). Additional cylinders would be charged at double the price. A 14.8 kg cylinder now costs Rs 300.

Petroleum ministry sources said a decision on the Parikh recommendations was likely either close to the Union Budget, to be presented on February 26, or sometime in March just after the budget.

A senior government official said it would be difficult to completely free diesel prices from government control as it had a high impact on inflation: diesel is used in transport and industry, virtually touching citizens on everything they consume.

The government regulates the sale price for domestic cooking gas and kerosene sold through fair price shops, and picks up the bills for state-owned oil firms that sell petrol and diesel at lower prices.

The panel has proposed that the kerosene subsidy be reduced through a special scheme to aid the poorest people.