Petroleum Minister M Veerappa Moily on Friday indicated that the Government will keep the consumer interest in mind while considering the Kirit Parikh panel's suggestion of a hike in diesel and lPG prices.
The Government-appointed Kirit Parikh committee suggested "immediately" hiking prices of diesel by Rs 5 a litre, Rs 4 per litre in kerosene and Rs 250 per cylinder in lPG, reducing annual entitlement of subsidised cooking gas cylinder to six from nine and phasing out diesel subsidy in one year to cut a record subsidy burden.
"Economically that is the right decision but how practical is it, how we can apply (it), that is something we have to take a view on it," Moily told reporters.
The Minister said the suggestions given by the Committee are "very good" as they will help restore fiscal balance. "If the country has to go forward, reform is a must. But the question is whether we can implement what has been recommended because we have to balance between the consumer (interest) and government revenue. A balance view will be taken on the report," he said.
Diesel is currently sold at Rs 9.9 a litre loss. It could take over one-and-half years to wipe out the Rs 9.9 a litre loss at the current rate of raising diesel price every month by 50 paise per litre.
Moily said the 50 paise a litre hike will continue irrespective of the drubbing that Congress faced in the assembly elections. "Election results will not drive UPA government or Congress to panic. Congress or UPA will not act in panic. These decisions have been taken in national interest and we will continue to act in best interest of the country and its people," he said.
Without the phased adjustment in rates being effected, the country will not have money to buy raw material (crude oil) and there will be shortages of fuel across the country, he said.