Aiyar may recommend Rs 50 hike in LPG price

Mani Shankar Aiyar, union minister of petroleum and natural gas, is expected to suggest a steep hike of up to Rs 50 per cylinder in domestic LPG price, and two different rates for kerosene from 2006.

Aiyar is likely to tell the high-powered Energy Coordination Committee (ECC), chaired by Prime Minister Manmohan Singh, next Friday (December 16) that the over Rs 110 per cylinder loss on selling domestic LPG can be bridged by raising price by Rs 50 on January 1 and then again on July 1 next year.

A top petroleum ministry official said he was also likely to suggest that kerosene be priced differently for people living below the poverty line (BPL) and those above it.

The price of kerosene sold to BPL families through the PDS system is suggested to be increased by Re 1 a litre to Rs 10 per litre while the same for APL families will be priced at Rs 15 a litre. This would be raised to Rs 18 by year-end.

The ECC has asked Aiyar to make presentation on three items - issues arising from the murder of IOC officer Manjunath and steps to curb adulteration of diesel with kerosene, pricing of petroleum products, and domestic oil production.

Aiyar's price hike proposal, however, may not be accepted by the Prime Minister considering the political ramifications in a year when four crucial states go to polls. Besides, the Cabinet had, last time, shot down his proposal to raise LPG price by a mere Rs 5 per cylinder.

Aiyar has also been advised not to make any suggestions on the pricing of petroleum products as the committee headed by Economic Advisory Council chairman C Rangarajan was to make a presentation on the issue.

(Press Trust of India)