Thaindian News

Kolkata, Aug 26 (IANS) Economist Kirit S. Parikh, who heads the panel constituted by Prime Minister Manmohan Singh for oil pricing reforms, Friday said the government was reluctant to decontrol diesel prices, fearing its adverse inflationary impact.

“If the government wants, it can decontrol diesel any day. It is afraid of the inflationary impact the move would have,” said Parikh on the sidelines of a programme here.

“When inflation is running at an all-time high, it (government) feels increasing the diesel prices will not be appropriate,” he added.

The panel had earlier recommended total decontrol of pricing of auto fuels along with creating a level playing field for all players in the market, whether state-owned or private.

Parikh said the unwillingness of the government to adopt the reform was also due to political pressure.

“While the (union) finance ministry seems to understand the rationale behind decontrolling, the political opponents have not, which is why the government, owing to political pressure, is reluctant to go for the move,” he said.

Parikh also accused the government of inaction in spite of feasible suggestion given for the implementation of the panel’s recommendations.

“I have suggested other ways for doing it (decontrolling) where its immediate adverse impact can be avoided.

“The government can reduce the taxes and decontrol diesel without raising the prices which means the consumer pays the same prices as before. But we are yet to get a reply from the government on this,” he added.