Oil ministry says no move to hike LPG, kerosene prices

The ministry of petroleum and natural gas has refuted reports that it is planning to move the Cabinet Committee on Political Affairs (CCPA) soon with a proposal to raise the price of kerosene supplied though public distribution system by Rs4 a litre and that of domestic cooking gas (LPG) by Rs250 per cylinder.

''Certain media reports have appeared speculating about increase in prices of subsidised LPG and PDS Kerosene. It is clarified that the ministry of petroleum and natural gas is not proposing any increase in their prices,'' the ministry said in a note released on Friday.

Even as minister of state for petroleum and natural gas Dharmendra Pradhan insisted that the government has no plan to raise fuel prices, the oil ministry is reported to be preparing a draft note, based on the recommendations of an expert committee, for consideration of the CCPA on pricing of diesel, kerosene and LPG.

"There is no such proposal with the government," Pradhan said with reference to a report that his ministry is considering a note to the cabinet for raising kerosene and LPG prices as recommended by an expert committee.

The Kirit Parikh panel, appointed by the UPA government, has recommended raising kerosene prices by Rs4-5 per litre and LPG by Rs250 per cylinder "It is clarified that the ministry of petroleum and natural gas is not proposing any increase in their prices", the ministry said in a statement.

Pradhan also said there was no fresh proposal to increase LPG prices or to change the duty structure on diesel.

However, reports say the NDA government has endorsed the previous UPA government's monthly 40-50 paisa per litre increase in diesel prices and is likely to propose its continuation till the present Rs3.40 a litre loss on the fuel is fully bridged.

After the diesel subsidy is eliminated during the course of the year, the ministry wants CCPA to authorise it to decontrol or free price of diesel as was done in case of petrol in June 2010.

Since its decontrol, petrol rates are being revised on the 1st and 16th of every month, based on the average cost in the previous fortnight.

Barring a few exceptions, petrol prices have moved in tandem with cost since then.

Sources said the ministry wants the CCPA to consider recommendations of an expert panel headed by former Planning Commission member Kirit S Parikh.

The committee had, in October last year recommended to the government that diesel prices should be hiked by Rs5 per litre, kerosene by Rs4 a litre and domestic LPG rates by Rs250 per cylinder immediately to cut fuel subsidy bill by Rs72,000 crore.

State-run oil marketing companies at present lose nearly Rs5 per litre of diesel, Rs33.07 a litre on kerosene sold through the public distribution system (PDS) and Rs449.17 on subsidized LPG supplied to domestic consumers, they said.

State-run oil marketing companies on Wednesday increased prices of non-subsidised cooking gas or liquefied petroleum gas (LPG) by Rs16.50 per cylinder and aviation turbine fuel (ATF) or jet fuel by over half percent as global crude prices surged due to the Iraq crisis.

Meanwhile, in a separate development, some 100 employees of the three state-run oil marketing companies have voluntarily given up LPG subsidy to allow increased provision of affordable eco-friendly fuel LPG to households in the country.

Pradhan has personally congratulated all these employees by sending a personal letter and has exhorted all the citizens who can afford market priced LPG to join this movement.

''The LPG subsidy can be given up by visiting the distributor and giving a written request to this effect. Very shortly this facility will be made available via the web also. Let us all join hands in nation building,'' he said.