New Delhi: A decision on raising diesel and LPG prices is expected on Thursday. Sources have told CNN-IBN that Prime Minister Manmohan Singh is expected to take a call on raising diesel and LPG prices at the cabinet meet on Thursday.
The Cabinet Committee of Political Affairs has to approve the petroleum ministry's proposals to increase the prices. CNN-IBN has learnt that a hike of Rs 4.50 per litre in diesel prices and that of Rs 100 per cylinder for LPG prices is expected.
The Oil Ministry had made a proposal to Cabinet to raise diesel prices and increase the number of subsidised LPG cylinders available to households to nine a year from the current cap of six, two oil ministry sources said on Wednesday.
The government argues this would help counter Rs 160,000 crore deficit. India, which imports more than 80 per cent of its fuel needs, liberalised petrol prices in June 2010 but continues to regulate diesel prices to protect the poor. Prime Minister Manmohan Singh has recently said the country must gradually bring local fuel prices in line with global prices.
Manmohan Singh had warned that the government must raise diesel, kerosene and cooking gas prices in a phased manner as India's fuel prices are well below international prices. "Energy remains under priced in our country, with coal, petroleum products and natural gas prices well below international prices. To meet our target of rapid, inclusive and sustainable growth we must undertake a phased rationalisation of energy prices to bring them in line with world prices," he had said on Monday.