Oil lobby focuses on petrol hike

Jun 04, 2010 - Age Correspondent |

mumbai

The demand for raising prices of petroleum products by the oil refining companies and the oil and gas ministry has been growing louder since the government made quite a hefty hike in the natural gas prices.

Deregulation of petrol prices could be the easiest for the government to do as it would not have a cascading effect on commodity prices. The government sees no reason why it should continue to subsidise petrol with the taxpayers money, since it is used primarily for personal transport.
Raising diesel and LPG prices could be politically sensitive, specially since the prices of primary articles have been going up week after week. Raising diesel prices could by more difficult because it is used in public transport as also in goods carriers and ant rise in diesel would have a snowballing effect on prices of all goods and services.
Besides the railway minister, Ms Mamata Banerjee is a member of the EGoM and she is unlikely to acquiesce to a hike.

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