Diesel price decontrol on hold as food inflation high: Min

Minister of State for Petroleum and Natural Gas Jitin Prasada today said that the decision to decontrol diesel prices has been put on hold owing to the increase in food inflation.

"Given the current rate of increase in food inflation, the government has decided to hold the deregularisation of diesel," Prasada told reporters on the sidelines of the NGV India 2010 seminar here today.

The government had decontrolled petrol prices in June this year and had indicated that it would deregulate diesel prices in the near-term.

Earlier, during the seminar, Prasada said the government would give top priority to natural gas as it did to fertiliser and power sectors.

"CNG sector is an important sector and cannot be overlooked. The government will ensure that gas allocation for the city gas distribution networks, apart from fertiliser and power sector, will also be on the top priority to help the growth of the sector," Prasada said.

To encourage people to shift to CNG from petrol or diesel, there was a need for a favourable tax structure and availability of land for setting up gas stations.

"If the availability of CNG in India is increased, vehicle manufacturers will make CNG compatible vehicles. The government will provide all the necessary support to promote this," he said.