BackOil ministry for raising LPG, kerosene prices; diesel hikes may continue
The ministry is likely to propose a raise in kerosene price by Rs4/litre and in LPG rates by Rs250/cylinder
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New Delhi: The oil ministry is likely to move the cabinet committee on political affairs (CCPA) soon with an expert panel’s recommendations on raising kerosene price by ₹ 4 a litre and cooking gas (LPG) rates by ₹ 250 per cylinder.
The ministry is preparing a draft note for consideration of the CCPA on pricing of diesel, kerosene and LPG, officials said in the capital.
Endorsing the previous United Progressive Alliance (UPA) government’s monthly 40-50 paise per litre increase in diesel prices, the ministry is likely to propose that the monthly revisions may continue till the present ₹ 3.40 a litre loss on the fuel is fully bridged.
After the diesel subsidy is eliminated during the course of the year, the ministry wants CCPA to authorize it to decontrol or free the price of diesel as was done in for petrol in June 2010.
Since its decontrol, petrol rates have been revised on the 1st and 16th day of every month based on average cost in the previous fortnight. Barring a few exceptions, petrol prices have moved in tandem with cost since then.
People with knowledge of the matter said the ministry wants the CCPA to consider recommendations of an expert panel headed by former Planning Commission member Kirit S. Parikh.
The committee had in October last year recommended to the government that diesel prices should be hiked by ₹ 5 per litre, kerosene by ₹ 4 a litre and domestic LPG rates by ₹ 250 per cylinder immediately to cut the fuel subsidy bill by ₹ 72,000 crore.
But as the monthly increases have led to under-recoveries, or the difference between cost and retail price, falling below ₹ 5, the ministry is unlikely to press for implementation of the panel’s recommendation on diesel.
Besides diesel, state-owned oil firms at present lose ₹ 33.07 a litre on kerosene sold through the public distribution system (PDS) and ₹ 449.17 on LPG, they said.
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