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Rediff News  All News  » Business » Fuel price hike seems inevitable: Congress sources

Fuel price hike seems inevitable: Congress sources

Last updated on: February 11, 2010 03:25 IST

If sources in the Congress party are to be believed, a hike in the price of petrol, diesel and cooking gas seems "inevitable".

Sources indicate the hike may be effected even before Parliament's Budget Session, but the details are still being fine-tuned by the government as it is working on bringing on board its allies, particularly Trinamool leader Mamata Banerjee, who raised a banner of revolt.   
A meeting of the cabinet committee on prices, which was to be held, has been deferred, say sources, with the Union Petroleum Minister Minister Murli Deora preferring to speak to the allies separately. He met the Telecom Minister A Raja and spoke to Mamta Banerjee over phone.

He is reported to have made a strong pitch to free petrol prices from government's control and advocated a moderate increase in diesel, cooking gas and even kerosene, saying that public sector undertakings were in a precarious position and would be hit even further if fuel prices were not hiked.

At the moment, there is a Rs 46,000-crore loss with the government pitching in by putting Rs 12,000 crore in. Before the budget is presented on February 26, he would like to reduce the subsidy burden on petroleum products, sources said.

The Cabinet is scheduled to meet on Thursday, but the fuel hike issue is not listed yet. 

There was speculation that the Congress core committee would discuss the issue of petro hike but after the meeting it was clarified that the issue was not discussed.

On the issue of the proposed hike, AICC spokesman Abhishek Singhvi said sometimes hikes are unavoidable. He said national and international exigencies have ensured that the increase takes place.


Renu Mittal