PM returns from G20 meet to a storm over fuel price hike

Prime minister Manmohan Singh, who returned to India from the G20 summit this morning, will have a tough time over the next few days in managing allies of his United Progressive Alliance (UPA) government over the petrol price hike issue.

While Singh is firm on the fuel price hike, he will be under increasing pressure not just from allies such as the Trinamool Congress, but also from within the Congress to roll-back the hike in the price of petrol.

But speaking to reporters before jetting back to Delhi, Singh displayed firmness that has been missing in his approach in the past.

''We must move in the direction of decontrolling more prices,'' asserted the premier. ''I have no hesitation in saying markets must find their own levels.''

The economist-prime minister reiterated that the government should push for deregulation in the price of fuel. While admitting that food inflation as a problem, Singh noted that the price of food grains was stable. ''But vegetables, egg prices are going up.

That reflects more demand for these commodities than supply and shows a sign of growing prosperity,'' said Singh. He also expressed concerns over the growing fiscal deficit and said it has to be reduced.

Finance minister Pranab Mukherjee is expected to brief the prime minister on the petrol price hike later on Saturday and the two will also discuss on how to tackle allies such as West Bengal chief minister – and Trinamool Congress chief – Mamata Banerjee.