New Delhi, Jan 4 (PTI): The Government may increase the prices of Diesel, kerosene and LPG or cooking gas prices soon as it considers the Vijay Kelkar Committee’s recommendations on reducing the fiscal deficit.
The Kelkar Committee, which was appointed by the Finance Ministry to suggest a roadmap for fiscal consolidation, has suggested an immediate hike in fuel prices and complete deregulation of diesel prices by the start of 2014-15 fiscal. It also suggested raising kerosene and LPG rates.
“That (Vijay Kelkar committee recommendation on deregulating diesel and raising kerosene and LPG rates) is a proposal. It is still at proposal stage. The (Petroleum) Ministry is only processing that report and we are yet to take a decision,” Oil Minister M Veerappa Moily told reporters here.
Though the minister did not indicate a price hike soon, officials speaking on condition of anonymity said a proposal based on Kelkar Committee recommendations will be taken to Cabinet soon and rates will go up if it is approved.
In September the panel had recommended “immediate increase in petroleum prices. This should be continued in the next year in such a way that the prices of diesel are fully deregulated by the start of 2014-15. The prices of kerosene and LPG also should be revised regularly to keep the subsidy levels at affordable levels.”
Diesel, which currently costs Rs 47.15 per litre in Delhi, was marked up last on September 14 , by a steep Rs 5.63 per litre .Subsidised kerosene currently costs Rs 14.79 per litre in Delhi, a rate not changed since June 2011.Open market rates are much higher Rs 35.
State-owned oil companies currently sell diesel at a loss of Rs 10.16 per litre, kerosene at Rs 32.17 a litre and LPG at Rs 490.50 per 14.2-kg cylinder.
Moily said the government was also considering raising the cap on supply of subsidised cooking gas (LPG) cylinders to 9 per household in a year from current limit of six.