Kirit Parikh panel For Fuel Price Hike, Petrol, Diesel

Kiriti Parikh on Wednesday presented the report on fuel pricing to Petroleum Minister Murli Deora. The panel in its report advocated total decontrol of oil prices, while recommending an immediate increase in prices of kerosene by Rs 6 per litre and LPG rates by Rs 100 a cylinder.

"Policy to address government's fiscal problems" Parekh Parekh. LPG burden subsidy currently very high at Rs 287/ cylinder. Parikh panel report favours a hike of Rs 100 per LPG cylinder

The finance minister, however, wants to reduce fuel subsidy burden. He is in favour of deregulation , as mounting subsidy burden is a major concern for the public exchequer. The government had to pay over Rs 71,000 crore in 2008-09 as fuel subsidy though oil bonds.

The government may take a decision on freeing petrol and diesel prices after the report. Price of petrol may go up by Rs 4.70 a litre and diesel by Rs 2.30 a litre if the government gives the pricing freedom to state-owned oil marketing companies - IndianOil Corporation (IOC) Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL).

A price hike of petrol and diesel is imminent unless finance ministry pays full cash compensation to state-owned oil companies for kerosene and cooking gas, an oil ministry official said requesting anonymity. The finance ministry has decided to pay a compensation of only Rs 12,000 crore in 2009-10 to public sector oilcos for selling kerosene and cooking gas below cost as against total estimated revenue loss of Rs 31,000 crore in the fiscal year.