CII demands dual pricing of diesel

Phase out huge subsidy on urban use of cooking gas, CII said

The government should introduce "dual pricing of diesel" and phase out the huge subsidy on urban use of cooking gas, industry body CII today said.

"The current under recoveries in diesel and LPG requires immediate action to ensure that dual pricing of diesel pricing is introduced, where non farm use of diesel should have minimum subsidy. Also the huge subsidy on urban use of LPG should be phased out," it said in a statement.

The chamber said the increase in price of petrol is steep and would not resolve the issue of ballooning fuel subsidy.

Wednesday, state-owned oil companies raised petrol prices by Rs 7.5 per litre here.

CII has urged the government to address the subsidies in diesel and LPG urgently. "Kerosene being a poor man's fuel should continue to get the government support for the time being," it said.

However, PHD Chamber said that the steep hike in petrol prices is "unfortunate" in the wake of the limited scope for the government to absorb the impact of the depreciating rupee.

"Though the crude oil prices have declined significantly in the last few weeks, its potential positive impact on India's oil marketing companies' under-recoveries has been nullified with the continuously weakening rupee," PHDCCI said.

The present move may stoke inflation in the ensuing months, it added.

The rupee had slumped to a fresh low of 56 against the dollar Wednesday.