The economists within the Government may agree that auto and cooking fuel prices hikes are ‘unavoidable’, but the politicians think otherwise.
A Cabinet Committee on Political Affairs (CCPA) meeting, scheduled for Tuesday to supposedly consider the issue, was deferred, with no new dates notified.
Insiders say there were differences among Congress party members on price hike. A meeting of the Congress Core Committee began late evening to discuss the issue, sources said, adding that once the party agrees, it will be easier to take a ‘difficult’ decision.
Through the day, speculation was high that the CCPA could discuss raising diesel, cooking gas and PDS kerosene prices, though the matter was not on its agenda. What fuelled the speculation was the meeting between Petroleum Minister S. Jaipal Reddy and Finance Minister P. Chidambaram, prior to the CCPA meeting.
Once a decision on pricing these three products is taken, the public sector oil marketing companies will raise the price of petrol, which is currently being sold almost Rs 6 a litre below market price. According to the OMCs, the desired increase in diesel price is Rs 19.26 a litre, PDS kerosene Rs 34.34 a litre and domestic LPG Rs 347 a cylinder.
With no compensation coming their way for selling petroleum products at Government-controlled prices, the OMCs’ finances are getting strained. The Petroleum Ministry has already circulated a note for CCPA, and the Minister has sought a price hike.