The Hindu : National : Oil price: Ministers to meet PM

Online edition of India's National Newspaper
Wednesday, Apr 27, 2005

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National

Oil price: Ministers to meet PM

Special Correspondent

NEW DELHI: Failing to arrive at a consensus on the oil price issue, the Finance Minister, P. Chidambaram, and the Petroleum Minister, Mani Shankar Aiyar, are likely to meet the Prime Minister, Manmohan Singh, shortly to take a decision.

With the oil prices ruling high in international markets, informed sources say that a "political" decision will have to be taken, sooner than later, as to whether the duties on petroleum products reduced effectively so that the consumers are not affected, or the prices of diesel and petrol raised, a move which is bound to have a cascading effect on the inflationary spiral. The Ministry of Petroleum and Natural Gas is seeking an increase of Rs. 2.50 a litre in the price of petrol along with an increase of Rs. 1.30 a litre in that of diesel, following the Finance Minister's reluctance over reducing the duties, saying that the entire tinkering exercise would be "revenue neutral".

Accordingly, the Oil Ministry is of the view that the increases in the prices of petrol and diesel, which includes the additional cost of producing cleaner fuel — Rs. 0.30 a litre on petrol and Rs. 0.24 a litre on diesel — should be passed on to the consumers.

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