Centre mulling to implement Kelkar panel report to clip fiscal deficit

The prices of diesel and LPG could go up once the report is effected

The Centre is mulling to implement Vijay Kelkar Committee report prescribing to cut fiscal deficits. The suggestions—if implemented—would trigger a hike in diesel, kerosene and cooking gas prices.

The panel in September had suggested immediate hiking of fuel prices and deregulation of diesel prices by the start of 2014-15 fiscal.

It also suggested raising kerosene and LPG rates.

"It (reccommendations on diesel) is still at a proposal stage. Petroleum Ministry is processing that report. We are yet to decide," Oil Minister M Veerappa Moily told reporters here.

"The exercise should be continued in the next year in such a way that the prices of diesel are fully deregulated by the start of 2014-15. The prices of kerosene and LPG also should be revised regularly to keep the subsidies at affordable levels," said the report.

Price of diesel currently costing Rs 47.15 per litre in Delhi was last revised on September 14 when it was hiked by a steep Rs 5.63 per litre.

Kerosene rates have not changed since June 2011. Currently kerosene costs Rs 14.79 per litre in Delhi.

State-owned oil companies currently sell diesel at a loss of Rs 10.16 per litre, kerosene at Rs 32.17 a litre and LPG at Rs 490.50 per 14.2-kg cylinder.

Moily added that the government was also considering raising the cap on supply of subsidised cooking gas cylinders to 9 per household in a year from existing six cylinders.