Subsidy on kerosene, LPG to continue

Petroleum Minister Murli Deora today said prices of LPG and kerosene would not be tinkered with and subsidy on the two petroleum products would continue beyond March 31.

"Prices of LPG and kerosene will not be increased and the government subsidy on these two products will continue beyond March 31," Deora told reporters on the sidelines of the launch of oil and gas conservation fortnight.

The government had set aside a budgetary allocation of Rs 2,900 crore for fiscal 2006-07 as subsidy on sale of LPG and kerosene through the public distribution system. The government currently provides a subsidy of Rs 15 per litre of kerosene and of Rs 150 per cylinder of LPG.

It had targeted to phase out subsidies on the two petroleum products by April. Deora also said that prices of petrol and diesel would be cut only if the country's basket of crude oil fell below $50 a barrel and remained there for a month. Petroleum Secretary MS Srinivasan, however, reiterated that the government would review prices of transportation fuels on January 31.

"The price of Indian basket of crude oil has come below $51 per barrel which is good for us," Srinivasan said.

India's crude oil basket hit its lowest level since April at $50.47 per barrel on Friday.