India’s cabinet meet on fuel prices deferred

May 29th, 2008 - 8:15 pm ICT by admin  

A file-photo of Manmohan Singh

New Delhi, May 29 (IANS) A meeting of India’s cabinet scheduled Thursday was postponed, delaying by another day a decision on hiking prices of transport fuels and approving a package to bail out state-run oil firms for the losses incurred by selling fuels below the costs. “The meeting has been postponed. It will now be held either tomorrow or even on Saturday,” an official said, referring to the cabinet meeting that was to be chaired by Prime Minister Manmohan Singh Thursday evening.

With the problem also taking a political overtone on account of opposition to a fuel price hike by the Left parties, Manmohan Singh met United Progressive Alliance (UPA) chairperson Sonia Gandhi with some of his cabinet colleagues.

Petroleum and Natural Gas Minister Murli Deora, who was present at the meeting, told reporters that a decision on the crucial subject would be taken in a day or two.

Earlier in the day, the prime minister reviewed the situation along with Deora, External Affairs Minister Pranab Mukherjee, Finance Minister P. Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Speaking after the meeting, Deora said various options were being considered to tide over the situation and asked people not to panic. “I appeal to the people to please cooperate with the authorities,” he said.

The minister said that the Left parties, which prop up the UPA government, were “cooperative” with the government and that a solution would be found soon.

But senior Communist Party of India-Marxist (CPI-M) leader Sitaram Yechury said a hike in petrol and other fuels would be a “very cruel” burden on the people since they are already facing high inflation.

“It is a fact international crude prices are rising. We completely sympathise with oil companies, since they are the ones who are taking a beating. But what is the solution? Not a price hike,” he said.

India last raised prices Feb 14 after nearly 20 months.

“Due to the very unprecedented rise in the prices, we are trying to find a solution to this very difficult problem,” the minister said, adding state-run retailers of petroleum fuels were facing a tough time.

Indian Oil Corp, in fact, reported the first losses in nine quarters Wednesday, amidst the warning that fuel may be rationed if a decision was not taken soon. Like other retailers it was also prevented from hiking prices of petroleum fuels.

“We have taken a call. We have to restrict sales to a reasonable level,” warned the company chairman S. Behuria at a press conference, indicating some form of rationing. “Obviously, we are not going to import at a loss,” he added.

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