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Vajpayee, Sinha review petro product prices

Amidst growing demand for rolling back the hike in price of cooking gas and kerosene, Prime Minister A B Vajpayee on Friday held a review meeting of the oil sector with Finance Minister Yashwant Sinha and Petroleum Minister Ram Naik.

The meeting assumes importance in the wake of an increase of about $3 in international crude prices since the presentation of the Union Budget for 2002-03, which translates into an additional burden of upto Rs 20 per cylinder of cooking gas and Rs 1.35 per litre on kerosene.

Vajpayee had on March 11 assured a delegation of Bharatiya Janata Party Mahila Morcha that the government would examine the issue of reduction in the Rs 40 per cylinder hike in prices of LPG and Rs 1.50 per litre of kerosene.

Naik declined to divulge the details of the discussion that he had with Vajpayee and Sinha on the possibilities of rolling back the increase in prices of the two cooking medium made effective from the night of February 28.

It is understood that the petroleum ministry has given a detailed analysis of the impact of increase on prices of petroleum products which would also lead to much higher revenue generation for the government on the prevailing rate of excise and import duties.

Naik followed up the half-an-hour meeting with a separate discussion with Sinha.

"There are many issues relating to dismantling of the Administered Pricing Mechanism, (and) we discussed that," he said.

Naik said the $3 increase in international crude oil prices translated into an additional burden of Rs 2.30 per litre on petrol, Rs 2 per litre on diesel, Rs 1.35 per litre on kerosene and Rs 15-20 per cylinder on LPG.

The implications of increase in crude oil prices on domestic petro product prices was discussed at the meeting.

Naik, however, clarified that petrol and diesel pricing would be freed from April 1 when APM would be dismantled, and domestic prices would be a reflection of increase or decrease in international crude prices.

The Budget had factored global crude oil prices at around $20 a barrel when deciding on reducing subsidy on LPG and kerosene to 25 and 33 per cent respectively.

Crude prices have, however, shot up to over $23 a barrel during the last ten days.

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