Reddy rules out diesel price decontrol for now
27 Jan 2011
With food inflation at an all time high, petroleum minister S Jaipal Reddy today ruled out freeing of diesel prices from government control, saying the move was not politically and practically feasible.
"It is not possible (just now)," he told reporters in New Delhi.
The planned decontrol of diesel as decided by an Empowered Group of Ministers (EGoM) in June last year, would end up pushing up price of fuel by Rs7 a litre, sparking a general and food inflation.
With food inflation running at 15.57 per cent, a diesel price rise now would fuel further push up prices.
"Let me make it clear, I am in agreement in theory with (Planning Commission deputy chairman) Montek Singh Ahluwalia that diesel and other fuel prices should be deregulated but I will request him to examine (such a move) practically and politically," he said ruling out decontrol of prices just now.
Ahluwalia has advocated freeing of diesel prices, on the lines of petrol prices deregulation, so as to cut government subsidies.
Reddy replied in the negative to questions regarding raising of kerosene prices to check its adulteration in diesel.
