India may consider further cuts in fuel prices: Chidambaram

December 16th, 2008 - 3:37 pm ICT by IANS  

Manmohan SinghNew Delhi, Dec 16 (IANS) The Indian government may permit further cuts in prices of transport fuels if crude oil continues to slip in international markets, Home Minister P. Chidambaram told parliament Tuesday.Answering supplementary questions in Rajya Sabha on behalf of Prime Minister Manmohan Singh, who holds the finance portfolio, Chidambaram said the government was looking at the global crude market closely.

“We have said we will watch the price further. Further reduction is possible,” said the minister, who held the finance portfolio, before being shifted to his new office in the wake of the Mumbai terror attacks.

India had Dec 5 allowed its state-run fuel retailers to cut prices of gasoline and diesel for the first time in 22 months to push its slowing economy, with a cushion coming from the $100 per barrel drop in global crude oil prices.

Companies like Indian Oil Corp were allowed to cut prices by Rs.5 a litre on petrol and Rs.2 a litre on diesel. The prices of cooking gas distributed to households under a subsidised system were, however, kept unchanged.

Chidambaram also spoke on India’s growth and said the fiscal package announced by the government last week and monetary measures taken by the Reserve Bank of India (RBI) should ensure that India’s maintains a healthy economic expansion.

“Today, government policy - and I believe, the RBI’s policy - is biased in favour of growth. This is why the prime minister announced a stimulus package a few days ago,” he said.

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