Date:14/01/2008 URL: http://www.thehindu.com/2008/01/14/stories/2008011457910100.htm

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Marginal rise in petrol prices on the cards

Ashok Dasgupta

NEW DELHI: A marginal increase in the prices of petroleum products is likely to be announced later next week. With the Assembly elections to some States over and even the Left parties agreeing to a minor upward revision in prices along with appropriate duty cuts, the stage is set for the Centre to correct the pricing aberration in petrol, diesel and cooking gas.

A Group of Ministers (GoM) headed by External Affairs Minister Pranab Mukherjee is to meet on January 17 to discuss the options on pricing, along with commensurate reductions in import duties and place its recommendations to the Cabinet for final approval.

GoM meet

Alongside, the GoM is also expected to deliberate on re-introducing the market-determined fuel pricing mechanism as was in vogue during the NDA regime. While a final decision on this issue is likely to be taken later this month, Petroleum Minister Murli Deora has already discussed the price revision issue with top Left party leaders and received the go-ahead.

The options to be placed before the GoM for a decision is a choice between a price hike of Rs.4 a litre on petrol along with Rs.2 a litre on diesel or an increase of Rs.2 a litre on petrol along with Re.1 a litre on diesel prices. Both options carry with them import duty cuts.

As for domestic LPG, the price increase, if implemented, may be to the extent of Rs. 20 a cylinder (14.5 kg).