Govt not to roll back fuel price hike

The government today said that it has no intention of rolling back the hike in fuel prices, despite widespread demand from various quarters.

"There is no proposal to roll back rise in prices of petrol and diesel as it impacts the fiscal situation," Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha.

In June, the government had decontrolled petrol, causing a hike of Rs 3.5 per litre, and increased diesel prices by Rs 2 a litre, LPG by Rs 35 a cylinder and kerosene by 3 a litre, amid protests by opposition parties.
    
The hike in fuel prices also led to a rise in the wholesale price index (WPI), which is currently treading the double-digit territory. The WPI-based year-on-year inflation in June 2010 is reported to be 10.55 per cent.
    
When asked if one of the factors attributable to the current trend of inflation is diversion of foodgrains for fuel, Meena responded in the negative.
    
He said that some of the key factors responsible for the current trend in inflation are rise in prices of pulses, milk, egg, meat and fish, sugar, iron ore, fibre, coal mining, mineral oil, iron and steel; low statistical base of last year; hike in fuel prices; and demand-supply mismatch in food items.
    
Further, Meena said that a number of the measures, including "selective ban on exports and futures trading in rice, urad and tur; zero duty on select food items; removal of restrictions in licensing, stock limits...; distribution of imported pulses and edible oils through the PDS and release of higher quota of non-levy sugar," have been taken to contain prices of essential commodities.