Fuel price hike good news: Montek

Fuel price hike good news: Montek

New Delhi: Planning Commission on Friday said the decision of oil marketing companies to raise petrol price by 3.14 per litre is a good news and will provide credibility to the economic reforms process.

“What has happened (fuel price hike)... on that front it is a good news. I regard that as a vindication...(and) an increase in credibility of basic part of the reforms strategy," Planning Commission deputy chairman Montek Singh Ahluwalia told reporters here.

State-owned oil companies, including Indina Oil, Bharat Petroleum and Hindustan Petroleum, on Thursday hiked petrol price citing impact of depreciating value of rupee against dollar on import of crude oil.

After the hike, petrol price increased to 66.84 per litre in Delhi. This is the second hike in four months. Oil companies had last increased petrol price by 5 per litre on 15 May this year.

On impact of fuel price hike on the automobile sector, Ahluwalia said, “I don’t believe that fuel price hike is hurting investment sentiments... We are standing by the signal given by the government that fuel price (in India) will be aligned with global rates."

The decision to hike petrol price is in sync with the views of the Planning Commission, which has been advocating that energy prices in the country should be aligned with global rates.

Asked if terror strikes would affect investment environment, he said, “I don’t think so."

Ahluwalia had earlier on Thursday admitted that investment in infrastructure during the 11th plan period (2007-12) is likely to be 10-12% short of the $500 billion target.