The Telegraph
Since 1st March, 1999
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Sonia sneezes, oil catches fire
- Centre considers price cut

New Delhi, Nov. 28: International petrol prices have been falling since August but it took a reminder from Sonia Gandhi to make the Centre sit up and consider a rollback.

The Centre is likely to reduce the prices of petrol and diesel after UPA chairperson Sonia expressed her party’s concern at the “hardship” the last hike had caused to the people.

Sonia cited dipping international prices but she chose the wrong day to say so. The global price has started flaring up over the last two days, limiting the Indian government’s room for manoeuvre.

Late tonight, the Centre was mulling a price cut of at least Re 1 per litre of petrol and diesel, though the Congress would have liked the reduction to be around Rs 2 and the Left Rs 4.

Another option on the table is to reduce the price of petrol by Rs 2 per litre and that of diesel by Re 1. During the last price hike, the price of petrol was increased by Rs 4 per litre and that of diesel by Rs 2.

Government sources said that while it was “more or less” decided that the prices would be rolled back, the quantum of reduction, the timing and the modality have yet to be finalised.

The price decision could be announced either in Parliament tomorrow or after a cabinet meeting on Thursday.

With the crude price boiling again, the petroleum ministry wanted to wait and watch. But political considerations are expected to outweigh the economic rationale, especially since the Punjab and Uttar Pradesh elections are around the corner.

Petroleum minister Murli Deora discussed the issue with Prime Minister Manmohan Singh this evening and presented various combinations of the amount by which the fuel prices could be reduced or left untouched and their impact on the finances of oil companies.

The government was left with few options after Sonia told a meeting of the Congress parliamentary party this morning: “The steep rise in the prices of diesel and petrol, despite the government’s best efforts not to pass on the entire burden to the consumer, has been causing hardship to the people. This has been and is a matter of concern to the party.”

Sonia said when the international prices of crude came down, she was assured by the Prime Minister that he would look into the possibility of reducing prices. “I am sure this is under active examination,” she said.

Sonia’s demand set in motion a flurry of activity in Parliament and outside. The issue was also discussed at a meeting of the cabinet committee on political affairs last night at the Prime Minister’s residence where finance minister P. Chidambaram and foreign minister Pranab Mukherjee were also present.

Itna shor-sharaba ke baad, kuch thos kadam uthanahee padega (after all this noise, we have to take a concrete step),” Deora told The Telegraph but he refused to elaborate, saying Parliament was in session.

A source close to the Prime Minister said that because Singh was a stickler for propriety and rules, he could go through the motion of discussing the matter in the next meeting of the cabinet on Thursday and then make the decision public.

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