Montek, Praful Patel differ on hiking diesel prices

There seems to be a distinct difference between policy-makers on closing the artificial disparity between petrol and diesel prices in the country.

While Planning Commission deputy chairman Montek Singh Ahluwalia on Wednesday told the Society of Indian Automobile Manufacturers (SIAM) that the country needs to correct the distortion between diesel and petrol prices, heavy industries minister Praful Patel at the same function said lower diesel prices are part of the government's "social obligation".

Ahluwalia said India needs to understand the ''energy reality'' as the world is entering an era of high energy costs, and that the price disparity between petrol and diesel should be corrected.

But in reaction to these remarks, Patel said, ''Diesel and petrol price disparity will stay as part of our social obligation. There is no move on the part of the government to decontrol prices.''

The government had freed petrol prices from government control in June last year, but diesel continues to be sold at a subsidised price as it is used by the politically sensitive farm sector as well as for running public and goods transport vehicles.

The prices of petrol and diesel are more or less the same at the refinery gate, but there is price difference of more than Rs20 per litre between the two fuels at the retail level due to government-mandated subsidy.