Cong core panel mulls hike in diesel and LPG prices

The Congress Core Committee, which has representatives of the party and the government, discussed today the issue of a price increase in diesel and kerosene along the lines suggested by the Kelkar Committee, but deferred a decision until after the weekend.

“Don’t worry, your weekend will not be disturbed,” Petroleum Minister M Veerappa Moily told reporters jocularly.

According to Congress sources, as and when the price hike is made public, there will be no opposition from the party. While Congress leaders have been maintaining that they don’t like the idea of a rise, they realise it is inevitable. While party leaders also would like the number of subsidised domestic cooking gas cylinders to be raised to 12 per family a year, the government is likely to raise them to nine per household, sources said.

The government has circulated a paper summarising various alternatives open to it. These include a one-time rise in LPG (by Rs 50 a cylinder); a calibrated increase in the price of diesel; and a dual-pricing policy for the fuel where bulk buyers like Indian Railways will have to buy it at market prices. This alone will yield Rs 12,000 crore additional revenue for the government, the paper says. It also says kerosene might be raised by 70 paise a litre.

Congress sources say in calendar year 2013, nearly 20 per cent of the Indian electorate will be voting in one election or other. One set of assembly elections – Meghalaya and Nagaland – has already been announced. Karnataka may have elections in March followed by Madhya Pradesh, Rajasthan and Delhi. Therefore, if prices are to be increased, the decision must be taken now so that the impact on the elections will be less.