Fuel decontrol decision soon

Feb 01, 2010

New Delhi, Feb. 1: The governmnet will decide on freeing petrol and diesel prices after the Kirit Parikh Committee submits its report, petroleum minister Murli Deora said Monday. Mr Deora acknowledged that the government was conscious of the effect any increase would have on citizens. "The cascading effect of a Rs 2/litre hike in diesel prices will be felt on food prices. But there is an urgent need to find a permanent solution to this recurring problem of under-recoveries."

The committee, set up in September to suggest reforms in petroleum pricing, is expected to submit its report this week.

Under-recoveries on the sale of petroleum products is expected to touch Rs 45,500 crores this fiscal year at current global prices. Mr Deora will meet finance minister Pranab Mukherjee on Tuesday to discuss the matter.

Petroleum secretary S. Sundareshan said Monday that the government could decide on raising the price of natural gas produced by ONGC and Oil India under the administered pricing mechanism within weeks. A Cabinet note has already been issued on the subject.

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