No rise in diesel, LPG prices for now

The prices of diesel, kerosene and domestic gas (LPG) will not be increased immediately, the Centre announced on Monday, in a damage control measure as speculations of diesel price hike were hitting the roof.

“I am not touching the prices of diesel, LPG or kerosene,” Petroleum Minister S Jaipal Reddy said, after an inter-ministerial meeting here on the impact of fuel price hike on inflation.

The date for the next meeting of Empowered Group of Ministers (EGoM) meeting, which decides on the revision of controlled fuel prices, is also not fixed yet.

The minister’s remarks came nearly a week after the state-owned oil companies resorted to the steepest ever hike of over Rs 7.50 per litre in the price of petrol, which led to widespread criticism from Opposition as well as allies of the UPA.

Meanwhile, Finance Minister Pranab Mukherjee declined to reply to a question whether the government would roll back the price hike of petrol. He said he had nothing to add to what Reddy had explained about the increase.

Analysts say a hike in diesel and LPG prices was enavitable in order to cut some subsidies and cap government’s subsidy burden at 2 per cent of the gross domestic product in the year 2012-13. The government’s policy makers, including Chief Economic Advisor Kaushik Basu and Prime Minister’s Economic Advisory Council Chairman C Rangarajan, have been most vocal on the demand to raise diesel prices, in order to cut the government’s expenditure to some extent and reach the goal of fiscal consolidation.

Reddy said Monday’s meeting did not decide on the next EGoM on controlled fuels. The prices of  diesel, LPG and kerosene are regulated and EGoM alone is empowered to take a decision on the price revision of these fuels. Reddy also ruled out dual pricing mechanism for diesel and cooking gas, but said his ministry had recommended raising taxes on diesel-driven vehicles.

HC notice to Centre on price hike

The Bombay High Court on Monday issued notices to the Centre, the Petroleum Ministry and the Finance Secretary on a PIL which claimed that the recent petrol price hike is “illegal” as it lacked Parliament’s approval and “ultra vires” of the Constitution, reports PTI from M umbai.