Govt plans LPG price cut; diesel, petrol may follow

After Diwali, the government looks poised to stage a populist bang. Top government and ruling coalition sources told TOI on Wednesday the 
oil ministry is looking at bringing down the price of cooking gas refills following a signal from oil minister Murli Deora. And, the move could well be a precursor to a reduction in motor fuel prices just before the elections.

The sources said Deora, more sensitive to Congress’ political calculus after indications of a February LS polls, is juggling whether the June hike in cooking gas price can be rolled back completely or partially. A reduction at this point will push up oil marketing firms’ losses on this fuel only marginally but could yield dividend for the ruling coalition at the hustings.

What is of greater importance is that the move denotes a shift in the government’s priorities from oil companies’ bottomlines to ballot boxes, raising the prospect of a cut in motor fuel prices closer to the polls.

Though the easing of international crude prices has considerably ligntened up the oil companies’ burden, the ministry would not brook the suggestion of a price-cut, citing accumulated losses and depreciated rupee. With the gas price cut coming on the table, the resistance seems to be softening.

This shift in priorities was evident when a senior ministry official told reporters while ruling out any formal move to cut fuel prices, “I do not see a trigger, unless political, for a reduction in fuel prices”. READ AT TIMES OF INDIA
 

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