New Delhi: Finance minister P. Chidambaram on Wednesday said that the government will have to look into various dimensions of the issue before taking any decision on deregulating diesel prices.
“The government has to take into account several dimensions of the issue before decision can be taken,” he said, when asked about the possibility of deregulating diesel prices.
The issues concerning diesel are not unidimensional, Chidambaram said, adding that while some argue for deregulation, others say it would fuel inflation. “On one column (of a newspaper) you will say deregulate diesel price and on another column you will say inflation (will rise). These are not unidimensional issues, you cannot approach a issue from one dimension,” he said.
Overall inflation in November stood at 7.24%, much above the Reserve Bank of India’s comfort level of 5-6%.
The government had in 2010 taken an “in-principle” decision to deregulate diesel prices, but could not implement it because of political pressure. The decision was based on the recommendations made by the Kirit Parikh committee.
The price of diesel, which currently costs Rs.47.15 per litre in Delhi, was last revised on 14 September when it was hiked by a steep Rs.5.63 per litre.
The government has promised a cash support of Rs.30,000 crore to oil marketing companies to cover a part of the Rs.85,586 crore revenue loss on fuel sales during April- September.