The ruling Congress Party at the centre is considering to raise the price of diesel and kerosene in order to reduce the government’s fuel subsidy burden and thereby reduce its fiscal deficit.
It may be noted that the Congress Core Committee, which has representatives of the party and the government, discussed the issue recently.
Although no decision has yet been taken, the party is said to be evolving consensus on raising prices for these fuels soon.
The party is also considering a move to raise the cap on the number of subsidised domestic cooking gas cylinders per family a year from the current six to at least nine.
But some reports suggest that the government may raise the price of cooking gas marginally instead of raising the cap on the number of cylinders. In this regard, the government circulated a paper summarising various alternatives open to it.
These include a one-time rise in LPG (by Rs 50 a cylinder); a calibrated increase in the price of diesel; and a dual-pricing policy for the fuel where bulk buyers like Indian Railways will have to buy it at market prices. This alone will yield Rs 12,000 crore additional revenue for the government, the paper says. It also says kerosene might be raised by 70 paise a litre.
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