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PM in principle ready to roll back LPG price hike

Pradeep Puri

Prime Minister Atal Bihari Vajpayee and Finance Minister Yashwant Sinha are learnt to have decided in principle to partially roll back the Rs 40 per cylinder increase in the price of liquefied petroleum gas for domestic use.

Although the issue was to be discussed at Wednesday's Cabinet meeting, the matter could not be taken up because the National Democratic Alliance meeting preceding it continued for a long time.

Highly placed sources told Business Standard that the matter could come up in the next meeting of the Cabinet due later this week.

The sources clarified that the Prime Minister and the finance minister could technically take the decision on their own and announce it in Parliament, they would, however, place it before the Cabinet for approval, before making it public.

The matter was left to Vajpayee after members of Parliament and ministers began exerting pressure for a rollback, citing deep political damage because of the hike in kerosene and LPG prices.

The Prime Minister is under pressure from the Telugu Desam Party, the ruling alliance's biggest ally outside government, as well as members of his own party.

While the demand is for a rollback in the prices of LPG and kerosene sold through the public distribution system, it is unlikely that the government will bring down the prices of both these fuels.

Petroleum ministry sources pointed out that over the years, LPG had become the cooking fuel not only for the rich and the middle class, but it had entered the kitchen of even the poor.

Therefore, according to them, it makes more political sense to reduce the price of only LPG to avoid disturbing the Budget parameters.

Sources said while the government would not roll back the entire increase of Rs 40 a cylinder of LPG, one of the options being discussed was to reduce the price by up to Rs 20 a cylinder.

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