New Delhi: India has no immediate plans to raise the retail prices of diesel, kerosene and cooking gas, oil minister S. Jaipal Reddy said on Monday, days after a move to raise petrol prices prompted a backlash that may result in a partial rollback.
Reddy’s remarks do not rule out a price hike, however, and there were unconfirmed TV reports that a group of ministers could consider such a move on 1 or 2 June.
“I am not touching (the prices of) diesel, LPG (liquefied petroleum gas) or kerosene,” he said, adding that no date has yet been fixed for a meeting of a ministerial panel to review the prices of the three subsidised fuels.
Heavy subsidies on diesel, LPG and kerosene helped push India’s fiscal deficit to 5.9% of GDP in the most recent fiscal year and investors and economists have long called for higher fuel prices to shore up government finances.
However, raising prices is politically fraught for a weakened Congress party-led government that faces opposition to fuel price increases from within its own ranks.
India’s state-owned oil fuel retailers announced an 11% petrol price hike last week after a six-month freeze on rises, seeking to recover losses from higher global oil prices and a plunging rupee that have deepened the country’s trade deficit.
That decision sparked two days of street protests and led the coalition government to open the way for a rollback of some of the increase.
Reddy said his ministry had recommended raising the factory gate tax on diesel-driven vehicles to curb growing consumption of the fuel, which is currently sold at substantially cheaper prices than petrol.
Shares in state oil companies Hindustan Petroleum Corp Ltd , Bharat Petroleum Corp Ltd and Oil and Natural Gas Corp extended their losses after Reddy’s remarks.