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Fuel price cut likely by year-end New Delhi, November 25 The government is likely to cut petrol price by Rs 5 a litre and diesel by Rs 3 per litre. The government had in June raised petrol price by Rs 5 a litre, diesel by Rs 3 per litre and domestic LPG by Rs 50 per cylinder as crude oil prices had climbed to record highs. The hike is now expected to be rolled back. “We have to reduce prices but it will happen after assembly elections,” he said. As a result of fall in the international oil prices, state-run Indian Oil, Bharat Petroleum and Hindustan Petroleum started making profit on sale of petrol from November 1 and on diesel from November 15. Petroleum secretary R.S. Pandey said though margins on petrol and diesel had turned positive, the companies were still losing money on domestic LPG and kerosene. The three firms lose Rs 22.40 a litre on kerosene and Rs 343.49 per LPG cylinder, which together work out to Rs 80 crore per day. Pandey said the Cabinet Committee on Economic Affairs would be informed of the factual position and directions sought. The three companies suffered a net loss of over Rs 14,000 crore in the first-half of the current fiscal and ways and means of making it up were to be worked on, he said. “As per our calculations, the oil companies will end the fiscal with a revenue loss on fuel sales of Rs 1,10,000 crore. How to make up for this will also have to be decided by the CCEA,” he added.
Montek sees growth at 7% “We should be planning for as low as 7 per cent (economic growth rate in the current fiscal),” Planning Commission deputy chairman Montek Singh Ahluwalia said at Economic Editors Conference. However, he hoped that inflation, which came down to 8.9 per cent, would decline further giving RBI a leeway to go for softening interest rates to spur growth. “Inflation would come down further. This gives us greater flexibility in monetary policy. Infusion of liquidity would ease interest rates,” he said. Yesterday, finance minister P Chidambaram had also said that policy rates might also moderate if the rate of inflation continues to decline. “RBI’s policy is now biased towards stimulating growth,” he had said. RBI has injected around Rs 2,75,000 crore into the system through cuts in reserve ratios and policy rate, repo, but there is demand for more money supply by the corporates. He said the Commission was drawing up an action plan to give a boost to infrastructure sectors, especially roads, irrigation and housing. Dr Ahluwalia said after the Plan is drawn up he would take it for approval to both Prime Minister Manmohan Singh and finance minister P Chidambaram. He said boost to infrastructure sectors would require enhancing budgetary provisions for which another set of supplementary demands for grants would be needed. The other mechanism that will be required would pertain to the Public-Private Partnership mode. The cobwebs in this regard would need to be eliminated, he said. The Plan Panel deputy head said enhancing public spending on the infrastructre sector was necessitated by the decline in private investment and would serve as a significant contracyclical measure to global downturn and its impact on the Indian economy. Dr Ahluwalia is part of the Apex Committee, appointed and headed by the Prime Minister. The other members are commerce and industry minister Kamal Nath and RBI Governor D
Subbarao.
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New Delhi, November 25