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GoM meet on fuel prices inconclusive

Sujay Mehdudia

NEW DELHI: A meeting of the Group of Ministers (GoM) on fuel prices on Thursday remained inconclusive. There were, however, indications that a hike was imminent.

“The GoM will meet again in a day or two to debate the matter and then send its recommendations to the Cabinet,” Petroleum and Natural Gas Minister Murli Deora said after the meeting.

Reliable sources said the GoM, headed by the External Affairs Minister, Pranab Mukherjee, discussed various options but could not arrive at a consensus.

One of the options discussed was raising petrol prices by Rs. 4 or Rs. 2 a litre, diesel by either Rs. 2 or Re. 1 and Rs. 50 for a 14.5-kg LPG cylinder. However, the LPG price hike was scaled down to Rs. 20 on the insistence some members of the GoM.

This option is to be accompanied by a 2.5 per cent cut in Customs duty on crude oil and petroleum products and a Re. 1 a litre Excise duty reduction on petrol and diesel.

The sources said the other option was a five per cent cut in Customs duty on crude oil and petroleum products, coupled with a Re. 1 a litre excise duty drop on petrol and diesel.

Two other options that combined the two rates for auto fuel price hikes with a Re. 1 a litre increase in kerosene price were also discussed but dropped as the government did not want to hurt the common man.

Petrol and diesel prices were last raised in June 2006 when crude price was $67 a barrel.

It is $92 a barrel this year. LPG prices were last raised by Rs. 20 a cylinder in November 2004 when crude price was $34 a barrel. Kerosene prices have not been changed since 2002.

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