Jaipal Reddy Spares Diesel and LPG From Hike in Prices

The recent petrol price hike of Rs. 7.50 has hurt the sentiments of the country like never before, even the excise duty hike was not as grave and disappointing as this is but with Hobson’s choice the citizens of India have started to make peace with their current situation. Amidst this, the government’s announcement of no hike in the prices of diesel or LPG has come as a relief. According to the Oil Minister, Mr. Jaipal Reddy, the price hike for the mass commodities like diesel, kerosene and domestic LPG is absolutely impossible in the current scenario.

This has been resulted post the discussion between the Finance Minister Pranab Mukherjee regarding the impacts of the hike in the fuel price on the inflation in the presence of Mr. Kaushik Basu who is the Chief Economic Adviser. Mr. Reddy also indicated that the date for the formal meeting of the ministerial panel regarding the revised prices of LPG, kerosene and diesel has not been fixed yet. Mr. Mukherjee is leading the Empowered Group of Ministers (EGoM) which met last time in June last year despite the depreciation in the value of the rupee and appreciation in the cost of imports because of the hike in the international prices of oil.

In the words of Mr. Reddy, the meeting was restricted to only the inter-ministerial group to check the inflation aspects and he was invited to offer his opinion and insight on the same before the recommendations of the group have been finalised. Without revealing much detail, he indicated that, his main focus was the price of diesel and its impact on the inflation and also that the date for the deregulation of diesel prices have not been finalised yet.

In the month of June in 2010, the members of EGoM had met to decide upon the deregulation and decontrolling of diesel prices but the implementation of the same was deferred. It has been speculated that the Finance Minister Mr. Pranab Mukherjee is planning on raising the excise duty on the cars being propelled by diesel which would ultimately result in the increase of the prices of the diesel cars. The Ministry of Oil department had weighed carefully this suggestion which came immediately after the Monday meeting of the inter-ministerial group on inflation and diesel pricing options.

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