EGoM to mull freeing petrol prices

An empowered Group of Ministers will meet in New Delhi on June 25 to consider possibly freeing petrol prices from government control and marginally hiking diesel prices.

An empowered Group of Ministers will meet in New Delhi on June 25 to consider possibly freeing petrol prices from government control and marginally hiking diesel prices.

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Sources said petrol price will go up Rs 3.73 a litre if the domestic prices are aligned with international rates. Petrol in Delhi currently costs Rs 47.93 per litre.

"Friday is the meeting of EGoM," Petroleum Minister Murli Deora told reporters, but refused to spell out the agenda. Domestic retail prices of petrol and diesel are benchmarked at close to USD 60 per barrel crude oil price, while the global rates currently are over USD 77 a barrel.

Deora has already asked states to lower sales tax on petrol and diesel to cushion consumers from the impact of fuel price hike, if any. "A rise in the international oil prices exerts an upward pressure on domestic prices of petroleum products," he wrote to states. "Ad valorem rates of VAT imposed by the state government further aggravates the impact of international oil prices on the consumers."

Sources said any decision to hike fuel prices would have to have the consent of UPA's alliance partners, Railway Minister Mamata Banerjee (TMC), and Agriculture Minister Sharad Pawar (NCP), given the inflationary impact of the decision.

In May, WPI-based inflation was 10.16 per cent. DMK leader and Fertiliser Minister M K Alagiri is on board the decision to raise fuel prices, sources said, adding that the EGoM would try to build consensus.