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Will talk to allies on fuel hike: Pranab

Finance Minister Pranab Mukherjee is open to discussing the fuel price hike with UPA allies — Mamata Banerjee’s Trinamool Congress and M. Karunanidhi’s DMK — who have appealed to Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi for its reversal, report Gautam Chikermane and Gaurav Choudhury.

business Updated: Mar 01, 2010 00:31 IST

Finance Minister Pranab Mukherjee is open to discussing the fuel price hike with UPA allies — Mamata Banerjee’s Trinamool Congress and M. Karunanidhi’s DMK — who have appealed to Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi for its reversal.

“These (objections to the fuel price hike) are not individual views,” he told HT in an interview on Sunday. “There is some divergence of opinion among some of our coalition partners. We will talk and then see.”

He did not say whether the fuel price hike of Rs 2.71 and Rs 2.55 on petrol and diesel, announced in Budget 2010 on Friday, would be withdrawn. “I don’t know,” he said. “Let’s see.”

“These (objections to the fuel price hike) are political perspectives,” he added. “Our capability of reducing the cost of production is not relevant here. Whatever the prices ruling in the international market, you will have to get it.”

India imports 80 per cent of its crude oil requirements, the prices of which had shot up to $147 (Rs 6,615) a barrel in June 2008 when excise duty concessions were announced by the government. Since then, they have fallen and stabilised around $80 (Rs 3,680).

He said a part of the price hike in international markets had been absorbed by the government. “We give it (kerosene) at Rs 8 per litre, when the cost is Rs 31 per litre,” he said. “In LPG, we are providing a subsidy of more than Rs 100.”

Last month, the Kirit Parikh Committee on fuel pricing had recommended complete deregulation of petrol and diesel prices while retaining targeted subsidies for kerosene and LPG, meant for families living below the poverty line.

Mukherjee was non-committal on whether the recommendations would be accepted. “To what extent (can we keep providing subsidies)? This is the issue the country as a whole must discuss and debate.”