India Inc today hailed the decision of hiking petrol, diesel, cooking gas and kerosene prices, saying the government has demonstrated ability to take a difficult political decision.
However, at the same time, the leading chambers of industry also talked about the inflationary pressures due to the decision to hike prices of petro products and free petrol from any administrative price control.
"CII welcomes the decision to deregulate fuel prices. While this will have some negative impact on the inflation in the short term ... The government has (shown) the ability to implement policy changes even if they are politically difficult," the industry body said.
CII said in the long term, the decision would have a positive impact.
According to FICCI, the government has taken a "very nuanced approach" in freeing up petrol prices.
Despite voicing inflationary concerns, the chambers said the move would have a negative impact on the inflation which has reached the double digit. But it would help bring viability in the country's oil economy.
While petrol price will go up by Rs 3.5 a litre and diesel by Rs two a litre, households will have to pay an additional Rs 35 per cylinder for cooking gas. Poor man's cooking fuel kerosene will be dearer by Rs 3 a litre from today.
Instead of keeping prices artificially suppressed, it was important to send correct price signals to consumers so that there is no wastage of scarce resources, CII said.
FICCI cautioned fluctuations in global oil prices "can derail the overall economy" and asked the government to evolve a mechanism to provide a cushion against the volatility.
