Government compelled to hike fuel price: Reddy

August 4th, 2011 - 8:30 pm ICT by IANS  

Pranab Mukherjee New Delhi, Aug 4 (IANS) The United Progressive Alliance government Thursday defended its recent decision to hike prices of diesel, cooking gas and kerosene, saying it was compelled to do so as international crude prices were on an upward trend.

“We were compelled to increase prices,” Petroleum Minister S.Jaipal Reddy said in reply to criticism from opposition members over the price hike.

The prices of diesel were increased by Rs.3 per litre, of kerosene by Rs.2 per litre and cooking gas by Rs.50 per cylinder.

Reddy said, despite the hike, state-run oil marketing companies will incur losses of about Rs.122,000 crore because of selling diesel, cooking gas and kerosene at below-cost prices.

India meets 80 percent of its oil needs through imports. During the current fiscal, the average price of crude has been around $113 a barrel (159 litres).

Reddy said the government had tried to reduce the quantum of increase by cutting customs and excise duties on petroleum products.

Meanwhile, Finance Minister Pranab Mukherjee said that the government would try to deregulate prices of diesel like it had done in the case of petrol.

“We are moving in that direction (of decontrol). There are no other proposals under consideration of the government,” Mukherjee told reporters outside parliament.

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