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Oil min to seek ministerial meet on fuel prices

business Updated: Feb 28, 2011 10:35 IST

Reuters
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Oil minister S Jaipal Reddy wants a ministerial meeting on fuel prices and will ask finance minister Pranab Mukherjee to set one up, but it will not happen before the budget on Feb. 28, he told reporters on Friday.

India freed petrol pricing last June, but diesel prices and cooking gas prices are set by the federal government.

Reddy said he would ask for the meeting, adding "the finance minister is busy with the budget at the moment."

Gasoline and diesel have weights of 1.09% and 4.67%, respectively, in the wholesale price index (WPI), India's main inflation measure, and raising fuel prices has a knock-on effect as farmers and manufacturers pass costs along.

Global crude oil prices, which have risen sharply on unrest in OPEC member Libya, retreated from highs on Friday as a senior industry official said top exporter Saudi Arabia had increased output to make up for any shortages.

Mukherjee said on Friday Indian markets need not worry about global price uncertainty, signalling the budget might ease taxes and rationalise subsidies to cushion the impact of high prices.

The previous oil minister, Murli Deora, wanted the government to roll back custom and production taxes slapped on petrol, diesel and crude oil in last year's budget, which was passed when international oil prices were about half current levels.

With inflation in India among the highest of the major world economies, raising diesel and other fuel prices appears highly unlikely.