Steep increase in price of diesel by Rs.5, kerosene by Rs.4 and LPG cylinder by Rs. 250 with immediate effect, is awaiting cabinet approval.
But with the Assembly elections in five States scheduled in the next months, the government is reluctant to take immediate action, but it is most likely that the cabinet approval will not be delayed more then by middle of December, if not earlier.
Petroleum and Natural Gas Ministry has set one panel headed by Kirit Parikh to suggest a methodology for pricing of diesel and cooking fuel.
This government appointed Kirit Parikh Committee on Wednesday has strongly recommended an increase of Rs. 5 per litre in price of diesel, a Rs. 4 per litre in kerosene and Rs. 250 increase in LPG cylinder with immediate effect, supporting the demand of petroleum ministry.
It also recommended that the limit for subsidised LPG cylinders be reduced from present 9 to 6 cylinders per annum to each household. It also has pitched for capping the subsidy on diesel at Rs. 6 per litre while giving a call for elimination of subsidy on diesel within one year .
The panel said the number of cylinders should be reduced from the present 9 to 6 cylinders. The price of LPG cylinder should be hiked by Rs. 250 immediately and the balance subsidy be phased out over the next 2 years through gradual price increase.
Petroleum and Natural Gas Minister, Veerappa Moily received the report and will be now awaiting cabinet approval, which is expected to come only after the assembly results are announced.
INDIA HONEST warns : In December fuel will fuel inflation to record level.