EGoM meets Monday on Parikh report

The empowered group of ministers (EGoM) scheduled to meet on Monday to deliberate on the recommendations of the Kirit Parikh report on petro-fuel pricing may consider a reduction in excise duty, plus an increase in the retail price, for petrol and diesel.

“This is a very opportune moment to free prices of petrol and diesel. While petrol prices can be raised by Rs 3 a litre to link it to market (pricing), in the case of diesel, the excise duty can be reduced to the tune of underrecovery, so that prices at the retail level remain unchanged. The decline in excise revenue can be compensated by the money raised from auction of 3G (telecom) spectrum,” Kirit Parikh told Business Standard.

The report, given in February, suggested market-linked prices for petrol and diesel, a partial increase of Rs 6 a litre for kerosene and Rs 100 on every cylinder of LPG. It also proposed a reduction in kerosene sold through ration cards by 20 per cent.

“They may not touch kerosene and LPG prices at the moment and prefer to wait before the Unique Identification scheme is put in place and the distribution is better targeted,” Parikh said.

Petroleum secretary S Sundareshan had earlier told Business Standard: “These decisions are politically sensitive and have to be sustained over a period of time.”